As the Bank of England becomes increasingly likely to increase interest rates, almost half of UK mortgage holders are unaware of their current interest rate, according to new reports.
More than a third were stunned to learn that if the base rate rises by just 1%, it could add £91 to the average UK variable mortgage payment.
With this in mind, a third of UK mortgage holders (31%) believe they would either have to make significant sacrifices or think they may struggle to make ends meet.
Two thirds of UK mortgage holders would prefer to be notified of a change to their mortgage rate via a printed letter – rising to three quarters of older borrowers.
People believe that a printed letter is most likely to prompt them into taking action and shopping around for a better mortgage deal.
Judith Donovan CBE, Chair of the Keep Me Posted campaign, the company behind the findings 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.”
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