Homeowners 'lose sight of mortgage rates'

Friday, March 5th 2010

Mortgage holders often do not know what rate they are paying on the loan because they see it as a "means to an end".

This is the view of senior technical manager at John Charcol Ray Boulger, who explained that people on fixed rate mortgages are more likely to be aware of charges than those on standard variable rates (SVRs).

When homeowners initially take out a mortgage, they are likely to understand the rates and details of the loan.

"But once interest rates change, I think that is when they tend to lose sight of what it is," Mr Boulger explained.

Earlier this week (March 3rd), the Post Office revealed that at least three million borrowers in the UK are unaware of the interest rates charged on their mortgage.

Some 29 per cent of people quizzed said they have no idea what the rate is and are using SVRs because they assume it is the best deal.

Mr Boulger predicted that the figures are actually "a gross underestimate" and that more than half of borrowers are probably in the dark about their rates.