In a survey of more than 1,500 UK homeowners a massive 25% believe current interest rates are either higher or the same than they have been in the past or simply don't know.
Within the 25% who are unaware, a staggering 9% of mortgage holders believe interest rates are slightly higher than they have been in the past, whilst 4% believe they are much higher than they have been previously.
The housing and homelessness charity is highlighting the research, conducted by the Council of Mortgage Lenders last year, on the day that the Monetary Policy Committee meets to decide whether record low interest rates should go up. Shelter is warning the equivalent of 2.8 million homeowners may be completely unprepared for the costs of rising interest rates based on their lack of awareness about where they are currently.
This is particularly concerning when many are already finding it intensely difficult to keep a roof over their head. Recent research by Shelter showed the number of homeowners struggling to pay their mortgage has risen by 78% in a year while the number of people using credit cards to help pay their rent or mortgage has increased by 50%. With so many homeowners already living on a knife edge, any increase in interest rates will seriously threaten their ability to keep hold of their home.
Commenting, Campbell Robb, chief executive of Shelter said: "It is frightening to think so many homeowners are completely unaware that interest rates are at a record low. This research makes us extremely concerned that millions will be financially unprepared when interest rates go up and won't have plans in place to manage increased costs.
"And it's not just mortgage costs that will be affected. Charges on other debts will rise at the same time, meaning people will have to pay more on other money they owe. This will push those already using credit cards to pay the mortgage each month into even deeper debt."
Mr Robb added: "Even for those who have been managing to stay afloat so far, we know only too well that just a small increase in some people's monthly outgoings will be the trigger that finally pushes them over the edge into a spiral of debt, repossession and possible homelessness.
"Millions of homeowners could be pushed to the brink unless they start making preparations now. We are urging people to find out if rising interest rates will affect them and prepare themselves for increasing mortgage costs by seeking advice early to help avoid putting their home at risk."
