New research has revealed that most UK mortgage borrowers are oblivious to size of their debt, with three in five unable to say what’s left to pay on their loan.
According to Momentum UK, despite a mortgage being the biggest financial commitment a person can make, just 40% of the 2,000 UK adults questioned were satisfied that they knew the remaining balance of their loan.
The Bank of England cut the base rate to 0.25% in August, prompting a wave of mortgage rate reductions. Despite the record-low rates currently on the market, just a third (33%) of borrowers in the study thought it was important to consider remortgaging once the fixed period of their loan ends.
The research also highlighted people’s confusion when it comes to making the best use of their money in a low-interest rate environment. Just a quarter (24%) were satisfied that they know whether it is better to overpay on a mortgage or top up a pension.
Dominic Baliszewski, director of consumer strategy for Momentum UK, said: “Mastering the basic elements of a mortgage can save households thousands of pounds of year. Yet millions of borrowers are missing out on huge savings by failing to address the issue, perhaps because they associate mortgages with stress.
“Managing the loan, especially knowing when you’re coming to the end of a fixed rate period, should be part and parcel of everyday financial management, and if your payments have gone up, it’s time to take action.
“With the vast number of transactions most people undertake each month, it has become difficult to keep an eye on monthly outgoings.”
