One in ten (13%) homeowners on a tracker rate are unsure how an increase to the base rate will affect their mortgage, and almost one in five (18%) believe their monthly payments will increase, but again not necessarily by as much as the base rate increase.
Even those on a fixed-rate mortgage aren’t as confident in their mortgage knowledge as they should be, as 20% state they are unsure what effect an increase to the base rate would have on their personal monthly mortgage repayments.
Meanwhile, 28% of homeowners with a fixed-rate mortgage believe their monthly payments will increase at some point once the base rate rises and, of these, one in 20 (5%) wrongly think they will experience an automatic increase once the base rate increases.
Karen Barrett, Chief Executive of unbiased.co.uk said: "Predictions of when the base rate will increase are drawing ever closer, but when it happens it will still come as a surprise to many homeowners. The base rate increase is inevitable and so when this happens homeowners need to ensure they are prepared for what this increase will mean for their personal finances. Those on tracker rates, standard variable rates and even fixed rates are in the dark about how their personal finances will be affected by this change, meaning it’s impossible for them to budget for the future.
"It’s vital for homeowners to regularly review their mortgage arrangements to ensure that they are on the best deal for them. Homeowners should seek whole of market mortgage advice to understand what deal they are currently on and when it’s the best time for them to move onto a new deal."
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