Mortgage holders 'do not know their interest rate'

Date:Thursday 4th March 2010
Author: Susanna Kavak

As many as three million mortgage holders in the UK do not know what rate of interest they are paying on their loans, it has been reported.

Research by the Post Office has found that 28 per cent of people have no idea how much they are paying back each month in interest off their loans.

Furthermore, 35 per cent are paying back cash on their institution's standard variable rate (SVR) in the belief that it is the best offer available to them, despite the fact that for many this may not be the case.

Post Office personal lending director Marco Hughes said that people who stick with the SVR are leaving themselves vulnerable if the Bank of England base rate rises.

"Switching mortgage does not have to be a stressful experience and spending a bit of time searching and comparing deals could save you a significant amount of money," he added.

The study follows the news that the Post Office has cut the rates on its fixed and tracker products, which are available with a loan-to-value of up to 80 per cent.