Millions of homeowners unaware of mortgage details

May 28, 2016 by Brendan O'Neill

Home owners

A new study has revealed that millions of home owners are unaware of how much their mortgage is costing them, and even what type of mortgage they have.

Research conducted by Habito, an online mortgage broker, has revealed that there are 7.6 million active mortgages in the UK. Of those, a third have no idea what the interest rate on their mortgage is.

Statistics show that one borrower in every eight has no idea whether they have a repayment or interest only mortgage, which is a concern as they could be left having to sell their home at the end of their mortgage term if they have no plans in place to repay the capital.

Up to 1.3 million borrowers don’t know how long their mortgage term is, while up to 1.4 million don’t know whether they have a fixed or variable rate mortgage. The research discovered that 700,000 home owners don’t even know the name of their lender.

More people in Wales know the rate of interest which they are paying, at 79%, while in the south east where properties are more expensive, just 63% are aware of what the interest rate is.

The founder and CEO of Habito, Daniel Hegarty, said that the report had uncovered a lack of knowledge about mortgage details among UK homeowners, which may be due to the complex mortgage application process. To make it easier, potential homeowners could approach a mortgage adviser who has undertaken CeMAP training in London or another city in the UK, so they can explain the process.