Hundreds of thousands of people would save money to help pay rising fuel bills and ease the impact of higher interest rates if they switched mortgage lenders, Britain's Financial Conduct Authority said on Tuesday.
The watchdog said the number of people who shop around for a better mortgage deal after the cheaper introductory interest rate expires, has fallen significantly since 2016.
The FCA estimated that borrowers of around 370,000 mortgages could save an average of 1,240 pounds ($1,513) a year for 2 years by switching to a 2-year fixed rate with their existing lender.
"Given the rising cost of living, it’s important that borrowers consider their options and switch if they can where it meets their needs and circumstances and saves them money," the FCA said in a statement.
The case for further regulatory intervention to reverse the decline in switching is not currently justified, the FCA said.
After years of low borrowing costs, the watchdog said shopping around was even more important given that interest rates are on the rise, with only 37% of borrowers protected from rate rises in the next two years.
The Bank of England is expected to hike borrowing costs again on Thursday, perhaps by as much as 50 basis points.
Last week, the FCA set out a tougher consumer protection rule.
"Whilst the Consumer Duty is not yet in force, firms shouldn’t wait to apply these requirements and should look for opportunities to support consumers to make the decisions they need to make," the FCA said.
($1 = 0.8194 pounds) (Reporting by Huw Jones; Editing by Bernadette Baum)