Nationwide: Mortgage rates misunderstood by Brits

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Nationwide: Mortgage rates misunderstood by Brits

Mon 26th Nov 2007

Three-quarters of Britons do not understand the difference which is made by a one per cent change in mortgage rates, according to a Nationwide study.

In a survey, 25 per cent of respondents correctly determined that a one per cent difference in mortgage rates on a £120,000 five-year fixed-rate deal could be worth £4,000.

Some 28 per cent thought the difference would be between £500 and £2,000, while 23 per cent admitted they had no clue.

Matthew Carter, Nationwide Building Society's divisional director for mortgages, said that the findings suggest people "could be wasting thousands of pounds".

"We therefore urge borrowers to make time to shop around and compare the total costs over the life of a deal before making a final decision," he continued.

"After all, a £4,000 plus saving on a five-year deal for a couple of hours of work is a pretty good return!"

Nationwide recently cut the price of its ten-year fixed-rate mortgage to 5.68 per cent.

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