" Over half (55%) of mortgage holders could reduce their payments and save nearly £300 per month by switching."
Habito found that this lack of switching is costing consumers across the nation an estimated £15.5 billion a year.
Additional polling found that more than half (52%) adults think they have overpaid for something because they signed a contract without fully understanding it.
One in three (34%) mortgage holders said they only read up to a quarter of the way through their contract because they were confused by the language it contained. They said that legal jargon (51%), confusing terms and conditions (48%) and the explanations of the implications of not adhering to the contract (34%) should be re-written to be easier to understand.
Combining seven independent readability measures, tracking features such as average word length (in syllables) and average sentence length, the University of Nottingham's Linguistic Profiling for Professionals department, found that the educational reading age needed to fully understand a mortgage contract is A-level standard, well above the average national reading age of 12.
90% of those surveyed believe the language used in contracts could be simplified and 95% of those questioned said that they think the Government should regulate to force providers to make contracts easier to understand.
Daniel Hegarty, founder and CEO of Habito, said: "For too long banks and lenders have bamboozled consumers with over-complicated industry language, meaning people frequently sleepwalk into signing and staying on hellish long-term agreements that aren't in their best interests. Enough is enough.
"Taking inspiration from the food industry, Habito is making itself a "free from" mortgage broker. For us, this means being free from confusing language, industry jargon and ropey customer communications. The fact that almost everyone wants regulation to force contracts to be easier to understand is hugely telling and we plan to campaign for that to happen."
Dr. Peter Backus, senior lecturer in Economics at the University of Manchester, commented: "Following the analysis of live (in-market) mortgage deals, my research shows that over half (55%) of mortgage holders could reduce their payments and save nearly £300 per month by switching.
"As a percentage of their current monthly payment, it's households with an educational reading age of Year 11 (GCSE) or below, who would benefit from switching the most. We also see that these households are more likely to be on variable rate mortgages, leaving them more vulnerable to future changes in the Bank of England base rate."
