With Bank of England interest rate-sellers set to announce their latest decision on Thursday, new research published today by the Keep Me Posted campaign has found that almost half of all UK mortgage holders (42%) are unaware of their current mortgage rate. Furthermore, over a third (38%) are surprised to learn that if the base rate rises by just 1%, it could add £91 to the average UK variable mortgage payment.
The research also found that when asked how they would like to be notified of a change to their mortgage rate, two thirds of mortgage holders (67%) preferred a printed letter, rising to 77% of the over 55s. This is compared to just 22% who would like an e-mail and 5% who would like a text. Furthermore, 65% of mortgage holders admitted that a printed letter would make them most likely to take action including shopping around for a better deal – compared to just 23% for e-mail and 5% for text.
When asked how a base rate rise would affect them, a third (31%) of mortgage holders polled believed that a rise of 1% would not be affordable. Of these, a fifth (20%) state that they would have to make significant sacrifices to afford their mortgage, and a one in ten (11%) think it would tip them into financial difficulties. A further 42% claimed they could afford it but they would find themselves financially stretched by this change.
Judith Donovan CBE, Chair of the Keep Me Posted campaign, said:
“There’s no doubt that at present, a large number of people stand to be affected significantly if the base rate rises, meaning many may be left struggling to afford their monthly mortgage payments. What was particularly shocking to us was the number of people that currently aren’t aware of their mortgage rate. It is also clear from our research that homeowners are more likely to react to any changes if notified via a posted letter. Companies should be aware that digital channels may not be suitable for all their customers and should be careful not to take a one size fits all approach.”
