Half of mortgage holders ignorant of rate
The survey of 1000 mortgage holders also revealed that almost a quarter of mortgage holders are unaware of the effect of a Bank of England base rate rise, as 5% wrongly believe that a rate rise would be good news for mortgagers.
Julie-Ann Haines, customer director at Principality Building Society, said: “We would encourage you to take time now to get to know your rate and the finer details of your mortgage so you find out about increases in your monthly payment before Bank of England rates increase.
“We are expecting a rise in the Bank of England base rate in the next few months but this is likely to be a very small rise occurring most probably in the first quarter of 2015.
“In real terms, a quarter per cent rise on the estimated average mortgage of £113,549 equates to around an extra £23.66 a month or less than £6 per week – which should be manageable for the majority.
“However, rates will differ depending on the amount you have borrowed and period you have borrowed it for.”
Just 36% of mortgage holders can name the current loan to value on their mortgage, although 95% can name their provider, 74% know how much they owe and 76% know their mortgage repayment date.
Haines added: “Over the course of the next few years base rates are expected to increase further so homeowners should do the calculation on an online mortgage calculator or speak to their mortgage adviser to estimate what a larger rise may mean for you.
“But the key to responsible mortgage management is to be on the front foot, know your product and anticipate any change in rate before you see its impact on your bank statement. It’s tough to do that if you don’t know your rate in the first place.
“Just taking half an hour a month to refresh their product knowledge or meeting a mortgage adviser to ensure the mortgage is right for them can help customers prepare for any potential changes which could considerably affect their outgoings.”
Of the factors most likely to attract a customer to a mortgage, 61% of mortgage holders said interest rates would be most likely to draw them in.