Millions are unaware of their mortgage rate

Category: Mortgages
Date: 3/3/2010

Over three million homeowners are unaware of the rate of interest which they are currently paying on their mortgage.

Over a third (35 per cent) of borrowers are currently repaying their home loan at their lender's standard variable rate (SVR), possibly in the belief that they are enjoying the lowest repayments on offer, according to Post Office Mortgages.

Some 29 per cent of those on a SVR do not know what their mortgage rate is, however, and are only assuming that their current rate is the best available to them.

For many currently sitting on their lender's SVR, preferable rates could be found elsewhere.

"Although it might seem that staying on your current SVR is the easiest thing to do, you are much more vulnerable to interest rates," commented Marco Hughes, director of Post Office Personal Lending.

"Some providers have increased their SVRs quite significantly even though the Bank of England base rate has not moved and as a result many borrowers are seeing their monthly mortgage repayments increase more quickly than they thought.

"If you're thinking about switching mortgage, now is the best time to do it, before rates rise further."

In addition, figures showed that almost half (49 per cent) said they thought their current mortgage included a facility that allows them to overpay, but were choosing not to take advantage of the opportunity.

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