As many as five million homeowners have no idea what interest they are paying on their current mortgage, research suggests.
The study, called Mortgage Waste Report and conducted by Impartial.co.uk, also found almost two-and-a-half million people planning to re-mortgage are pessimistic about their options.
According to Impartial, while fixed rate mortgages are by far the most popular mortgage product amongst British homeowners, 24% of fixed rate borrowers are in the dark about their current mortgage interest rate.
Karen Barrett, marketing director of Impartial.co.uk, says: “With the effects of the credit crunch increasing and homeowners tightening their purse strings, it has never been more important for mortgage holders to know exactly what rate of interest they are paying.
“Without knowing their monthly outgoings, homeowners are unable to monitor their finances and make crucial decisions in this pressured economic climate.”
Impartial says its Mortgage Waste Report found that, with 2.4 million people planning to remortgage in the next six months there appears to be little optimism about the prospect of refinancing their property.
According to the study, almost half (45%) of mortgage holders are pessimistic about the prospect of refinancing their property, with a massive 14% scoring their feelings of positivity at 0 out of 10, with 10 being very positive. This compared to only 31% who felt positive about re-mortgaging their property.
Impartial adds that, with mortgage deals constantly changing, it appears the younger generations are even less confident in securing the right mortgage.
Around 20% of homeowners aged 18 to 34 score themselves 0 out of 10 in terms of positivity about re-mortgaging.
“Getting the best mortgage advice in the current environment is vital, as many people can easily find themselves in a difficult situation financially,” Barrett says.
“With deals constantly changing, homeowners need to feel confident with their decisions – and for most this will only come after they have sought the best possible advice.
“These turbulent market conditions look like they are set to continue, so homeowners need to arm themselves with whole of market, impartial mortgage advisers who can guide them through tough times.”
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‘Important to have an anchor’
Report to be written by TPR
Lack of innovation for solutions
Some 2,000 consumers affected