There is a huge amount of confusion about mortgages and interest rates among consumers and borrowers, a survey has found, that indicates just how convoluted the housing market is for people borrowing or seeking to borrow to purchase a property.
Barclays Mortgages and the Centre for Economics and Business Research (CEBR) put together the report after surveying a range of people, with or without a mortgage, and their knowledge on interest rates.
Almost half (46 per cent) of people could not identify the current Bank of England base rate (0.5%, at time of writing), which has a huge impact on variable rate mortgages.
A slightly higher 49.5 per cent of people of people who were asked, who had a variable rate mortgage, were unaware that the Bank of England Base Rate will be rising at some point in 2015, or did not expect it to.
This is worrying because of how this will affect them. A base rate rise will increase the amounts of money that people have to pay out each month, possibly even pushing their payments out the range of what they can afford.
CEBR predicts that the average mortgage payments could rise by £81 per year by the end of 2015. However, this is dependent on how the rate rises, and they say that the increase could rocket to as high as a £119 annual increase.
This confusion is highlighted by 61 per cent of people asked who said that they were uncertain about the workings of the entire market. Changing opinions from experts, conflicting claims by politicians and differing statements from regulators have left people confused and uncertain about the market, it would seem.