Over-complicated jargon is deterring UK home buyers from switching their mortgage, despite the fact that they could save almost £300 a month by doing so, a new study suggests.The research, carried out by online mortgage broker Habito, suggests that 58% of homeowners are baffled by contracts, which are beyond the reading capabilities of half of UK adults. Carried out by the Universities of Manchester and Nottingham, the study also shows that 95% of people want government regulation of the lending industry to ensure that contracts are easier to understand, with 90% believing that the language used could be simplified. It is estimated that UK homeowners are paying a combined £15.5 billion a year more than they need to by not switching mortgages, due to the confusing nature of the contracts. The University of Nottingham’s Linguistic Profiling for Professionals Department (LiPP) combined seven independent readability measures, such as average word and sentence length and number of syllables, and found that readers would need to be at A-level standard to fully comprehend a mortgage contract. This is well above the national average reading age of 12.Dr. Peter Backus, senior lecturer in economics at the University of Manchester, revealed that homeowners with a higher level of education are more likely to switch sooner, with households at GCSE reading level staying tied to expensive deals up to 12 months longer than their more academic counterparts. Backus’ study indicates that mortgage holders with a reading age of year 11 (GCSE) or below, waste a disproportionate amount of their income on needlessly expensive mortgage repayments. His figures also show that 55% of all mortgage holders could reduce their repayments by up to £300 a month by switching. ‘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,’ he added.34% of mortgage holders admitted that they only read around a quarter of the contract because they were confused by the language contained within it, while 52% of adults believe they may have overpaid for something in the past, having signed a contract without fully understanding it. 51% also admitted they were were baffled by legal jargon, while almost as may were confused by confusing and long-winded terms and conditions. Meanwhile, 34% say that the implications of not adhering to the contract need to be explained clearer. ‘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,’ said Daniel Hegarty, founder of Habito.‘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,’ he added.Paula Higgins, chief executive of the HomeOwners Alliance, the UK’s only consumer group for home owners, described the findings as appalling. ‘It is shocking that mortgage lenders are boosting their profits by billions of pounds by pulling the wool over their customers’ eyes. It is time for the industry to stop forcing homeowners to sign tortuous contracts that only lawyers can understand,’ she said.