Consumers unsure of rate change impact
November 28, 2007 by admin
Filed under News, News-Mortgages
The majority of Brits are unclear on the value of a one per cent mortgage rate difference, it has emerged.
Research by Nationwide Building Society has found that 75 per cent of people in the UK do not know how much real difference this would make to their mortgage, which could be up to £4,000 on a five year fixed rate mortgage deal.
Meanwhile, when told to compare two five year mortgage deals to compare, the largest proportion of respondents (28 per cent) said there would be a difference of £500 to £2,000 between a £120,000 mortgage with interest of 5.6 per cent and one with interest of 6.6 per cent.
In fact the difference would be £4,000, which was correctly identified by just 23 per cent of respondents.
“People’s lives are busier than ever in the run up to the festive season and, as a result, they may be less inclined to shop around for the best deal. The temptation may be to take a slightly higher rate as an easier, less hassle option,” said Matthew Carter, divisional director for mortgages at Nationwide Building Society.
