Borrowers have no interest in rates

Three-quarters of Britons incorrectly think that adding 1 per cent onto the rate of interest accruing on their mortgage will have little effect.

When comparing two five-year mortgage deals,28 per cent said they thought the difference on a £120,000 mortgage with an interest rate at 5.6 per cent compared to a rate of 6 per cent would be between £500 and £2000.

Another 23 per cent said they had no idea at all - only 25 per cent correctly identified that the difference could be as much as £4,000.

Overall, older men are the most savvy, with those living in the South East, Midlands and Scotland pipping the others at the post.

If by shopping around, a consumer finds a mortgage deals that saved £4,000, this could cover the costs of:

• The majority of a household’s annual council tax or utility bills: an extra £800 a year would cover a significant proportion of an average £1,100 a year council tax bill or £1,200 a year utility bills
• £65 extra a month towards grocery shopping
• £800 a year towards mortgage overpayments
• An extra holiday a year