Occasional Paper No. 54: When discounted rates end: the cost of taking action in the mortgage market

When an introductory mortgage rate expires the majority of borrowers remortgage, but a minority end up paying reversion interest rates. Who are these borrowers and how much could they benefit from remortgaging?

Occasional Paper No.54 (PDF)


In the UK, many mortgages have an initial incentive period with a discounted interest rate, after which the interest rate increases.

While in 2016 the FCA found evidence that a minority of borrowers did not remortgage when they would have benefitted from it, not much is known about the drivers of this inertia.

This research aims to provide insights on this topic. Using administrative data, we study switching behaviour in the UK mortgage market.

This research is part of the latest set of evidence the FCA is releasing on mortgage switching.


Adiya Belgibayeva, Teresa Bono, Philippe Bracke, João Cocco and Tommaso Majer


Occasional Papers contribute to the work of the FCA by providing rigorous research results and stimulating debate. While they may not necessarily represent the position of the FCA, they are one source of evidence that the FCA may use while discharging its functions and to inform its views. The FCA endeavours to ensure that research outputs are correct, through checks including independent referee reports, but the nature of such research and choice of research methods is a matter for the authors using their expert judgement. To the extent that Occasional Papers contain any errors or omissions, they should be attributed to the individual authors, rather than to the FCA.