Britons are collectively throwing away £2.2 billion a year by failing to switch their mortgages to a more competitive rate, a consumer group has revealed.

Which? estimates that someone with an average mortgage of £58,000 could save up to £475 a year by ditching their current home loan for a better value one.

The group estimates that about one third of mortgage holders are currently paying a standard variable rate and these people are most likely to benefit from moving elsewhere.

It said lenders often reserved their lowest rates for new customers, putting people on to standard variable rates once their initial deals ran out.

Melanie Green, principal researcher at Which?, said: "Providers are using their customers' inertia to their advantage and getting away with charging longer-term customers high rates.

"It's customers themselves who are in the best position to change this by finding the best deal for them and either approaching their lender for a better deal or taking their business elsewhere."

The group has set up a new Which? Mortgage Search which helps people calculate how much they could save by moving their home loans.

The search looks through a constantly updated database of about 8,000 mortgages and calculates how much someone could save on their monthly repayment by changing lender, as well as the total possible saving excluding the cost of switching.

The Mortgage Search can be found at www.switchwithwhich.co.uk.

Friday January 09, 2004