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Alliance & Leicester

One in five homeowners plan to change their mortgage in the next year


Home improvement spending recovers from New Year slump

10th September 2003

With interest rates at a 52-year low and continuing fierce competition in the mortgage lending market, almost one in five (19 per cent) mortgage holders plan to shop around for a better deal during the next 12 months, according to the latest figures from Alliance & Leicester’s movingimproving index.

The research reveals that 19 per cent of borrowers are looking to arrange a new mortgage deal during the next 12 months, with eight per cent of them definitely looking to change their mortgage and a further 11 per cent considering the idea.

Although the figures reveal that the proportion of borrowers looking to secure a new mortgage has fallen from almost one in four (23 per cent) in February to almost one in five (19 per cent) now, this still represents a high proportion of homeowners.

Paul Cooper, Head of Mortgages at Alliance & Leicester, said: “With mortgage repayments being one of the biggest costs a homeowner faces, it is easy to see why so many people are looking to take advantage of the current low interest rates.

“The proportion of borrowers looking to change their mortgages has fallen from almost one in four (23 per cent) in February to almost one in five (19 per cent), this may reflect the fact that many borrowers have already arranged a new mortgage deal.”

Cooper continues: “Homeowners should not change their mortgage for the sake of it as there can be costs involved, people should take a sensible approach and look for an offer that suits their individual needs and not just the headline rate.”

Alliance & Leicester’s quarterly movingimproving index asked a GB representative sample of 2,000 people whether they were considering changing their mortgage and, if so, why.

Other key findings:

• The main reason for changing mortgage is to get a better deal, with 70 per cent of those looking for a new mortgage doing so to make savings. A further 20 per cent are changing their mortgage because they are buying a new property.

• Other reasons to change mortgage include dissatisfaction with their current mortgage provider (four per cent) and moving from an endowment mortgage (three per cent).

• Those in their 20s are the most likely to be changing their mortgage, with 30 per cent of this group definitely or possibly moving their mortgage during the next 12 months. They are followed by those in their 30s (22 per cent) and 40s (19 per cent).

• As in February, men are more likely to be considering changing their mortgages, with 23 per cent saying they are or might be compared to 15 per cent of women. In February, 27 per cent of men and 20 per cent of women were either definitely or possibly changing their mortgages.

Regional findings:

• Mortgage holders in Yorkshire and Humberside are the least likely to be looking for a new deal, with only 11 per cent considering shopping around over the next 12 months.

• Homeowners in the North of England are the most likely to be changing their mortgages, with 39 per cent planning to do so over the coming year.

For more information:
Sally Lauder Alliance & Leicester 0116 200 4047

Alliance & Leicester Press Office 0116 200 3355

Matthew Maxwell Scott Financial Dynamics 020 7269 7193

Notes to Editors:
1. The movingimproving research was undertaken via face-to-face interviews during August 2003 for Alliance & Leicester by RSGB Omnibus, a division of the TNS Group among a GB representative sample of 2,000 adults.
2. To be added to the movingimproving email list for future movingimproving news releases, email matthew.ms@fd.com
3. For copies of earlier movingimproving index releases or for more information on A&L’s current mortgage portfolio, contact Sally Lauder at Alliance & Leicester.

Table 1:

Intentions to Change Mortgages Within 12 Months (August 2003)

Yes – Definitely Yes - Possibly
London 7% 12%
South East 6% 13%
South West 9% 8%
Wales 15% 8%
East Anglia 6% 13%
West Mids 4% 9%
East Mids 8%
North West 5% 10%
York/Humber 3% 8%
23% 16%
Scotland 11% 8%
National Average 8% 11%


South East Essex, Hertfordshire, Bedfordshire, Buckinghamshire, Oxfordshire, Berkshire, Hampshire, Surrey, Sussex, Kent
South West Cornwall, Devon, Somerset, Dorset, Wiltshire, Gloucestershire
East Midlands Northants, Leicestershire, Lincolnshire, Nottinghamshire, Derbyshire
West Midlands Hereford, Worcester, Shropshire, Staffordshire, Warwickshire
East Anglia Norfolk, Suffolk, Cambridgeshire
North West   Cheshire, Greater Manchester, Lancashire, Merseyside
North         Cumbria, Durham, Northumberland, Cleveland, Tyne and Wear
Yorkshire Yorkshire/Humberside

Alliance & Leicester plc. Registered Office: Carlton Park, Narborough, Leicester LE19 0AL. Company No: 3263713. Registered in England. Alliance & Leicester plc is a member of the Legal & General Marketing Group, which is regulated by the FSA. Alliance & Leicester plc only sells the life assurance and investment products of that group. www.alliance-leicester.co.uk

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