Britons 'miscalculating' mortgage rates
Published On 26 November 2007
British homeowners are underestimating how much they could be saving on their mortgages, simply by miscalculating the difference one per cent could make on their rate.According to research from Nationwide Building Society, 75 per cent of people surveyed could not accurately work out how much more or less one per cent on their mortgage rate would be.
When asked to compare the difference in cost on a £120,000 mortgage loan at either 5.6 per cent or 6.6 per cent, 28 per cent thought it would be somewhere between £500 and £2,000.
A quarter of those polled answered correctly, saying the difference would be £4,000, but 23 per cent didn't have a clue.
"People's lives are busier than ever in the run up to the festive season and, as a result, they may be less inclined to shop around for the best deal," said Matthew Carter from Nationwide.
"But, as our research shows, most people don't understand the impact that just a one per cent difference can make, meaning they could be wasting thousands of pounds."
A previous study from the building society estimated that more than 250,000 homeowners will need to shop around for a remortgage by December as their fixed-rate mortgage deals come to an end.
