Nearly three in 10 (28%) homeowners on variable rate mortgages are unaware of how their monthly payments will increase should interest rates rise by 0.5%.
Jake Ranson, banking & financial institutions director, Equifax UK & Ireland, said: “The low interest rate environment has created a false sense of security among many homeowners, particularly for those who have taken out their first mortgage in recent years.
“Homeowners have had time to get their house in order, yet the research shows a high proportion of homeowners will get a nasty shock once rates rise.
“A bump of 0.5% can have a significant effect on mortgage repayments, forcing unprepared homeowners to seriously rethink their spending habits.
“There is also a risk of falling into arrears. This research highlights that although many anticipate a rate change, some borrowers are not being realistic about the impact this can have.”
