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One in 10 mortgage holders don't know what interest rate they're being charged, Which? research shows.
The findings come as turbulence in the mortgage market looks poised to carry over into the festive period and new year. In such a volatile time, it's key to know what rate you're on - and whether you could save money by looking elsewhere.
Here, we delve into our survey's results and offer advice on what to do if you want to switch mortgage deals.
In July, we carried out a survey of more than 2,000 homeowners to see what mortgage rate they were paying.
The most common answer was between 2% and 2.99% - almost one in four respondents (22%) gave this answer - and 3% to 3.99% was the second-most selected (18%).
This suggests a large swathe of mortgage holders are still on relatively low fixed mortgage rates, which are yet to expire. When they do expire, they will face the harsh reality of having to remortgage onto a much higher rate.
Our survey results show that almost one in four (19%) are already on rates higher than 5%. Expect this share to grow as more people come to remortgage in the coming months and year, with 500,000 coming off cheap deals in the festive period.
Alarmingly, our survey results show that 11% of mortgage-holders don't know what rate they're currently paying.
Not knowing the rate you're being charged could have serious repercussions. From thousands more paid in interest, to missed payments and lost financial opportunities, the costs of not knowing your rate can be big.
If you're on a tracker or standard variable rate (SVR), your rate could change - especially in today's climate. You don't want to be unaware of a large spike in the monthly payment, so make sure you're across your finances and know what rate you're on.
Once you know what your rate is, use our repayment calculator to see how much you'll pay in interest across the lifetime of the loan - and if your introductory rate has ended. See our guide on how to remortgage.
To find out your rate, contact your lender. If you find out you're on a very high rate (eg 7% or higher), it could make sense to switch. But switching mid-term from a fixed or tracker deal will likely cost you as there's a high chance your lender will impose an early repayment charge.
If you're on an SVR, it would make sense to switch as you're unlikely to face a penalty.
The average SVR is now 8.18%, well above the average two-year fix (6.38%), five-year fix (5.93%) and two-year tracker (6.2%), according to Moneyfacts data.
Someone with a £200,000 mortgage with 25 years remaining would have a monthly bill of £1,568 on the average SVR, while the average five-year fix would cost £1,280 a month - a £288 saving.
If you're on a low rate but will soon have to remortgage, you might want to consider overpaying on your current deal if you can afford to. Overpaying increases your equity in the property and chips away at the amount of interest you'll have to pay over the lifetime of the mortgage.
Find the right mortgage using the fee-free service provided by L&C Mortgages
Compare mortgagesIf you click on the link and complete a mortgage with L&C Mortgages, L&C is paid a commission by the lender and will share part of this fee with Which? Ltd helping fund our not-for-profit mission. We do not allow this relationship to affect our editorial independence. Your home or property may be repossessed if you do not keep up repayments on your mortgage.
For those who are coming up to remortgaging, there are simple steps you can take to get ahead of the game and ensure you get a good deal.
Your lender should get in touch with the best rates it can offer you before the end of your fixed term, but there's no need to wait. You can lock in a new deal six months before the end of your current one, so shop around for the best deals well in advance.
After locking in a deal, you can request a better one from the lender at any point before it starts.
In some cases, the best rate will be available from a different lender, but it's still worth speaking to your current bank before signing up elsewhere.
Staying with your lender will be quicker and easier than switching to a new one, so consider your options before taking the leap.
Two months ago, most major lenders told us they offer exclusive rates to their existing customers.
It's important not to get drawn in by the headline rate alone, as lenders sometimes set a market-leading rate but slap a four-figure arrangement fee on top.
Look for extra costs under different guises, such as a product, arrangement or completion fee, and use our mortgage repayment calculator to work out the total cost of the deal compared to others.
If you're not sure where to start with comparing mortgages, it's worth taking advice from a whole-of-market mortgage broker, who can analyse all of the deals available to find the right one for you.
To get an idea of the best deals currently available, check out our guide on the best mortgage rates, which includes deals specifically for remortgaging.
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