Home owners unaware of mortgage rate
Almost half of people do not know the current rate of their mortgage, research by communications campaigner Keep Me Posted has found.
The consumer group surveyed more than 1,000 people and found that 42% of UK mortgage holders are unaware of the interest rate on their mortgage.
The research also reveals that many people do not realise the potential effects of a rise in the base rate of interest. Nearly 4 in 10 (38%) respondents were surprised to learn that a 1% rise in the base rate could add £91 to the average variable mortgage payment.
When asked how a 1% base rate rise would affect them:
- 20% said they would have to make ‘significant sacrifices’ to afford it
- 11% believe the rise would cause financial difficulties
- 42% of respondents said the rise would be affordable but that they would be ‘financially stretched’.
The research also found:
- 67% would prefer to be notified of rate changes via printed letter
- 22% prefer to be notified by email, and just 5% would like a text
- 65% said printed letters are most likely to make them take action such as looking for a better deal.
Judith Donovan CBE, chair of the Keep Me Posted campaign, said:
“There’s no doubt that at present, a large number of people stand to be affected significantly if the base rate rises, meaning many may be left struggling to afford their monthly mortgage payments. What was particularly shocking to us was the number of people that currently aren’t aware of their mortgage rate.
“It is also clear from our research that homeowners are more likely to react to any changes if notified via a posted letter. Companies should be aware that digital channels may not be suitable for all their customers and should be careful not to take a one size fits all approach.”