24
Oct
Brits 'lack understanding of interest rates'
The overwhelming majority of Britons do not fully comprehend the
impact rising interest rates have on their mortgage payments, a new
study has revealed.
According to a survey of 1,700 adults conducted by personal finance
website CreditExpert.co.uk, seven out ten of those polled did not
know what kind of effect a rise of 0.5 per cent would have on a
£100,000 mortgage.
Of those who answered incorrectly, nearly one in five (19 per cent)
said that the rise would see repayments rise by double the true
figure.
Meanwhile, 17 per cent thought the rise would barely impact on
their repayments.
The survey also showed that four out of five respondents did not
know what is meant by the term annual percentage rate.
Jim Hodgkins, managing director of CreditExpert.co.uk, said: "The
lack of understanding of key terms and the effect of interest rate
changes is worrying.
"It's important for people to be familiar with standard financial
terms and stay on top of changes that affect their personal
finances so they can make the best possible decisions and
choices."
