Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner.

Over a quarter of mortgage holders do not know their interest rate

Some 27% of those with a mortgage admit they do not know what rate they are on, a survey of more than 2,000 people for campaign group the Homeowners Alliance found. (Joe Giddens/PA Wire)
Some 27% of those with a mortgage admit they do not know what rate they are on, a survey of more than 2,000 people for campaign group the Homeowners Alliance found. (Joe Giddens/PA Wire)

 

MORE than a quarter of mortgage holders do not know what interest rate they pay, a survey has found.

Some 27% of those with a mortgage admit they do not know what rate they are on, a survey of more than 2,000 people for campaign group the Homeowners Alliance found.

The findings were released after the Bank of England base rate was increased earlier this month for the first time in over a decade, meaning millions of variable rate mortgage holders face higher costs.

Nearly two-thirds (64%) of adults admit their understanding of mortgage terminology is “not good”, while more than half (55%) say the same about their awareness of different mortgage products, the research found.

Women tend to be less confident than men when rating their knowledge of mortgage terminology, the findings suggest.

Despite this, women showed a similar or better level of knowledge than men in several areas of mortgages, the research found.

Some 69% of women rated their understanding of mortgage terminology as “not good” compared with 58% of men.

But women were more likely to give a correct definition of terms such as fixed-rate mortgage – when an interest rate is set for an agreed period of time such as two, three, five or 10 years; negative equity – when the size of someone’s mortgage debt outweighs the current value of their home; and arrangement fee – a type of mortgage charge.

Men appeared to have a better understanding than women when it came to some different types of mortgage as well as the concept of loan-to-value – or how much a home owner borrows in relation to the value of the property.

Paula Higgins, chief executive of the Homeowners Alliance, warned some people could find themselves “sleepwalking into a financial nightmare”.

She said: “A mortgage is likely to be the largest financial commitment you’re ever likely to make.

“Knowing what product you’re on and when your current deal ends is critical to not ending up on a lender’s more expensive standard variable rate.”