Homeowners' ignorance is not bliss
Published ¤ 12/04/2011 14:28:15
Despite increasing speculation over when the Bank of England will raise interest rates, research from unbiased.co.uk shows nearly a quarter of all homeowners are completely unaware of the effect this increase will have on their mortgage repayments.
A worryingly high number of people on tracker or standard variable rate mortgages admitted they had no idea how an increase in the base rate would affect them. Even more worrying, one fifth of those on a fixed rate are unsure of the effect of a rate rise!
Karen Barrett, Chief Executive of unbiased.co.uk comments, "Predictions of when the base rate will increase are drawing ever closer, but when it happens it will still come as a surprise to many homeowners. The base rate increase is inevitable and so when this happens homeowners need to ensure they are prepared for what this increase will mean for their personal finances. Those on tracker rates, standard variable rates and even fixed rates are in the dark about how their personal finances will be affected by this change, meaning it's impossible for them to budget for the future.
"It's vital for homeowners to regularly review their mortgage arrangements to ensure that they are on the best deal for them."
For many, once the base rate begins to rise, it will be too late, as the best fixed rates will have already gone by then.
Paul Skinner from independent mortgage broker, PKS, said "We are seeing more and more people coming to us to fix their mortgages. Fixed rate deals are still fairly competitive, although many have been increased over the last 2-3 months. By the time the Bank of England decides to increase the base rate, most of the best fixed rates will have disappeared.
"Those people that decide to wait, enjoying their low variable rate mortgages, may end up missing the boat, and end up paying more in the long run."
It is essential to get independent advice when considering your mortgage options. PKS are a "truly" independent mortgage broker, with over 20 years experience. If you are considering changing your mortgage, or if you want to discuss your options, contact PKS today.
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