Do you know how much your mortgage costs?
Don’t worry, if you don’t you’re in good company as apparently nearly five million Britons have no idea how much their mortgage is costing them.
Research by digital mortgage broker Habito and YouGov found that a third (33%) of British mortgage holders don’t know what interest rate they’re paying.
The research suggests that the lack of knowledge by homeowners when it comes to their mortgage and their reluctance to manage mortgages effectively in the long-term is costing consumers some £29bn a year.
The research, which saw YouGov survey more than 4,000 adults, revealed than one in eight (more than 1.8m) mortgage holders don’t know if they have an interest-only mortgage.
Nearly one in 10 (over 1.4m) don’t know if they’re on a fixed or variable rate; nearly 1.3m don’t know how long their mortgage term is; and one in every 20 mortgage holders can’t even name their lender.
How savvy you are about your mortgage could depend on where you live and your gender, the research suggests.
Mortgage holders in Wales are the most in-the-know, with 79% knowing what interest rate they’re paying, compared to just 65% in London and 63% in the South East.
And while nearly three quarters (73%) of men know how much interest they pay on their mortgage, less than two thirds (61%) of women know how much their mortgage is costing them in interest.
Daniel Hegarty, CEO and founder of Habito, which describes itself as the UK’s first digital mortgage broker, said: “For most people, a mortgage is the biggest financial commitment of their lives, yet the application process is opaque, slow and untouched by technology.
“It’s no wonder there is such a widespread lack of awareness among existing mortgage holders and such reluctance to manage their mortgages over the long-term.
“Applying for a mortgage with a traditional broker is stressful and confusing – people just want it to be over as quickly as possible and then forget about it.
“It is time mortgages were brought into the 21st century.”
He said technology had simplified other aspects of people’s lives, but the mortgage application process was no different to 30 years ago.
“The industry has resisted change for decades and has been reluctant to put the customer at the heart of the process."