• Over half (51%) of mortgage holders believe interest rates will change in the next nine months.
• But one in seven (15%) mortgage holders don’t know what type of interest rate they are paying on their mortgage – whether it is a fixed, standard variable, tracker or discounted rate.
• 14 % of mortgage holders (two million people) say they do not know what they would cut back on if their mortgage payments increased by £200 per month.
• 54% of mortgage holders with a deal have no plans in place to review their mortgage situation, or will leave it to the last minute.
• Furthermore, 15% of mortgage holders with a deal (around 1.3 million people) do not know when their mortgage deal expires.
CFEB’s first campaign – Stay on top of your mortgage – is providing homeowners with essential help and advice to be prepared for when interest rates – or their personal circumstances – change.
Tony Hobman, Chief Executive said:
“Interest rates have been at record lows for some while now. Although there is uncertainty about when this will change, it is clear from our research that many people with mortgages haven’t thought about what it would mean for their monthly payments, or where they would find the extra money in their household budget if their mortgage rate was to go up.
“Lack of time means many of us often put off reviewing our finances, but it doesn’t have to be time consuming to keep on top of your money matters. Our Moneymadeclear
‘mortgage toolkit’ – which can take as little as five minutes – makes it easy to see where you stand so you can plan ahead.”
CFEB’s advice to consumers is to:
• Dig out the ‘Keyfacts’ paperwork you received from your lender when you took out your mortgage. This shows your interest rate deal and when it ends.
• Use the Moneymadeclear mortgage calculator to work out what a rise in interest rates will mean for your monthly payments.
• Use their impartial ‘mortgage toolkit’ at: www.moneymadeclear.org.uk/mortgages. There are five, 15 or 30 minute versions to help you give your finances a health check, so you can understand your options and plan ahead.
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