New research from the mortgage advice section of the consumer group Which? reveals that one in three mortgage holders have no idea what rate of interest they are paying.
It shows that some 32 per cent of mortgage holders were unaware of the rate of interest on their mortgage with slightly fewer - 29 per cent - being sure of their exact rate.
Separate analysis, again by Which?, has found a 55 per cent increase in the number of fixed rate deals on the market over the past two years, with fixed rates now making up just over three quarters of the products on the market.
The survey shows that 34 per cent of homeowners are currently on a standard variable rate mortgage - the default mortgage rate once a fixed rate deal ends. Which? claims that those people could be in line for a saving of up to £123 a month if they switched to a two year fixed rate deal.
“It's important to remember that fixed rate deals typically have higher rates than trackers - for the time being at least - but fixing now could potentially save you money in the long-term. Now is the time to seek independent mortgage advice if you are concerned about the impact a rate rise might have on your finances” says Which? spokesman David Blake.
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There's no financial education in this country. People are far too happy to leave it to their mortgage adviser or (incredibly) their bank.
Yeah, but if everyone was financially literate there would be no need for mortgage advisers or financial advisers or personal accounts.
It's like saying if everyone could sell their own home there would be no need for estate agents. But people like handing the responsibility over to someone else. Which, I think, is pretty sensible, assuming the person you hand over to knows what they're doing (unfortunately not a given!)
I agree with your point that people should be more educated when it comes to interest rates, money and mortgages, but these things are, by their very nature, pretty dull and tedious. It would take a very clever and creative person to jazz up interest rates. It's just something people don't really take much notice of, like the FTSE 100 or Katie Hopkins.
*personal accountants even.
It is a gamble, agreed, but one that has saved me thousands over the past few years. I was advised by pretty much everyone to seek a fixed rate term when my mortgage deal expired, however I have been keeping an eye on any news involving Mark Carney, the Bank of England and interest rates and decided to leave it at the SVR for a little longer. A few years on I have saved a fortune compared to what I would have been paying on a fixed rate term. Sooner or later I have to fix it - and ideally before they hike fixed rate terms.
Financial education should in part be incorporated into the curriculum; it's vital that people are aware of potential interest rate rises. Saving £123 a month is such a large amount!
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