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Shock statistics show borrowers’ ignorance over interest rates

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  • 10/03/2003
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Brokers are shocked at survey data showing nearly half of borrowers have no idea what rate they are ...

Brokers are shocked at survey data showing nearly half of borrowers have no idea what rate they are on.

Norwich & Peterborough Building Society (N&P) has found that although 97% of those with a mortgage are on a special deal, 49% do not know what rate of interest they pay, and could possibly do better.

James Rodea, business development director at Hamptons International Mortgages, acknowledged that revisiting clients when you think they could get a better deal was seldom time wasted. However, he took issue with the statistics.

He said: ‘I am shocked by the figures, we have found people are generally financially aware and know not only their rate but what their redemption penalties would be. That could be a London thing, but I doubt it.’

There is little resistance to remortgaging. Three quarters of those surveyed expressed an interest in saving money on their monthly mortgage payments over the life of the loan and 68% have switched mortgages to another lender to save themselves money in the past.

Rodea said: ‘Five years ago people concentrated on what rate they were paying. Nowadays, with interest rates so low, what they care about is what they are paying per month, rather than a headline rate.’

Of those with a mortgage, 49% knew what type of mortgage they wanted before they took it out, 32% were given advice and a recommendation on which mortgages were available and which was most suitable for them and 19% made an informed choice after being given information on the different types of mortgage on offer.


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