Consumers Unaware of Effects of Rising Loan Rates

Mon, 19 Nov 2007

CreditExpert.co.uk is reporting that 70% of British mortgage holders misunderstand the impact of rising interest rates on their repayments . The website has released a Personal Credit Index survey questioning Brits as to what effect a 0.5% increase would have on monthly repayments for a £100,000 interest only mortgage .

Of the respondents, 70 per cent answered incorrectly, whilst nearly eight out of ten British mortgage holders did not know the correct definition of the annual percentage rate (APR).

The survey also showed an increase in consumer credit confidence, and a greater confidence amongst people in their own finances. Consumer credit confidence rose by two points to 98, whilst the number of people comfortable with their level of borrowing increased by 2 per cent from 74% to 76%. Both of these levels are expected to drop in the next quarter as the burden of Christmas hits consumers.
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