Millions of homeowners are unaware what effect a rise in base rate will have on their monthly mortgage payments, disturbing research has revealed.
Despite growing speculation that base rate will rise in the near future, around one in five homeowners are clueless as to the impact this would have on their mortgage costs, according to unbiased.co.uk.
A worrying number of mortgage borrowers on standard variable rate (SVR) mortgages and on tracker rates admitted they were in the dark over how they would be affected if the Bank of England gave the okay to a rise in rates.
Even some of those on a fixed rate mortgage, whose payments will remain unchanged for the term of the deal regardless of what happens to base rate, said they were unsure whether their payments would be affected if base rate changed.
Of significant concern are the one in twenty fixed rate mortgage holders who incorrectly think their mortgage payments will increase automatically if base rate increases.
While no-one knows when base rate will start to rise, it is vital that homeowners are prepared and aware of the impact such a move will have on their finances.
Those on their lender's SVR and on tracker deals will see their payments change almost immediately.
Many mortgage borrowers are struggling to work out whether it is best to remain on their variable rates for a little while longer or move to a fixed rate mortgage before the base rate starts to rise.
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