Wednesday, Jul 07, 2010
How stupid are people in britain? DO these people deserve a house?
Yahoo: Most home owners unaware of impact of interest rate rise
Around 74pc of people with a mortgage admitted they did not know how a 1 percentage point rise in the Bank of England base rate would affect their monthly outgoings, according to the newly formed Consumer Financial Education Body (CFEB).
More worryingly, 15pc of people do not even know what type of mortgage they have, such as whether it is a fixed-rate deal, which would make them unaffected by an interest rate rise, or whether it is a variable-rate one, meaning their monthly payments would go up.
Posted by mark @ 12:52 PM (2853 views) Add Comment
22 Comments
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1. hpwatcher said...
Most people I know don't really care. And they have been shown to be exactly right not to care. BOE won't put them up.
2. Wickedw said...
Spot on hp. I wish we could bang interest rates to X%+ for a few months, well soon see whose planned correctly or whose suddenly got enough time to work it out (or generally blame someone else when times are bad because their 'advisor' never explained it to them).
3. cyril said...
You can ask these surveys in different ways so people may not be as daft as they seem.
Also, there are usually 2+ people in a household, and they don't all need to know about mortgages.
Thridly, I am a reasonably well informed chap but I don't know how a rise in the base rate would affect mortgages - because I don't know if the building society would pass it on. (I could hazard a guess though).
Sounds like a new quango trying to justify its continued existence to me.
4. tyrellcorporation said...
Spot on Cyril. Expect a flurry of pointless statistics from all sorts of weird 'bodies' over the next few months. I heard this morning apparently Exeter has a very high proportion of obese kids - time to shut Lidl then!
I wonder how many of those people interviewed actually knew what a base rate is anyway.
5. Paul Skinner said...
hpwatcher - That is a lovely thought, although very dangerous to live that way. If BoE were never to raise interest rates, then the country would be in all sorts of trouble. Interest rates WILL rise, it is just a question of WHEN?
cyril - Good point. Surveys can be very misleading.
Most people would not know exactly what a 1% increase in the interest rate would mean, especially if their mortgage is a repayment mortgage, as, without finding a calculator online (like the one at http://pks.org.uk/mortgagecalc.asp), it is very difficult to calculate. The formula to work out the repayments on a capital and interest mortgage are rather complex.
Having said that, I am sure most people (or those that deal with the mortgage in a household) will have a rough idea of the consequences on such a rise. At least I would hope they do.
Paul Skinner
6. urbanbear said...
The BOE rate is irrelevent, it is the LIBOR and other bank rates which matter, and these rates have risen!
7. mr g said...
What else could you expect from the vast majority who are obsessed by celeb and soap culture?
8. mr g said...
As there have been quite a few similar articles recently, wishful thinking perhaps but do the "experts" know something that we mere mortals don't, interest rate rises sooner rather than later?
Recaptcha Pedicure blocked.
9. alan said...
@ tyrellcorporation,
CFEB are not a "weird body". They were part of the FSA till a few months back, when they were split off under the Financial Services Act.
@ Mr G,
Its a sad time when people are focussed on celebs and the soaps. At the pub, I asked what the APR was for everyone's credit cards - nobody seemed to know (and I drink with people who all passed their "A" levels) !
Recaptcha: Dodders Digest
10. 51ck-6-51x said...
Only 51% of those surveyed expected a rate rise in the next 9 months - I wonder what % expected a fall, expected no change, and didn't know what the question meant.
RC: alleged creamer
11. This comment has been removed as it was found to be in breach of our Blog Policies.
12. hpwatcher said...
The BOE rate is irrelevent, it is the LIBOR and other bank rates which matter, and these rates have risen!
Not sure about that, as it isn't always passed on. Banks can always borrow off BOE at the low rates - as opposed to paying higher rates to savers.
13. Sureseam said...
Back in the mid 80's I had a flatmate who bought an apartment (a.k.a. rabbit hutch). He announced this with glee and was shocked when I said "Go recalculate and check you can eat when the MLR reaches 15%!".
He swore at me and went off. A couple of years later he thanked me and confirmed that he had done the maths. (And yes the MLR got close to that at a peak).
They say ignorance is no defence in court .... there will be many horror stories before this is over. The writing has been on the wall for a long while for anyone who thinks.
14. peter said...
No need for them to worry - or care what the interest rates are.
As soon as idiots like this squeal, the government will step in and bail them out at savers' expense.
I'm coming to the conclusion that there is no point in saving at all - or even having a job.
15. tenyearstogetmymoneyback said...
Wickedw ............ Great Idea. I have thought the same myself.
In engineering it is normal practice to shock test things. Only this week on the "How to Build a jet engine program"
they showed a bloke clouting the fan blades of a Jet engine with a hammer to make sure they didn't come loose.
I wonder how many peoples finances would be even less controlled than the "Blade Off" test (which destroyed the whole engine)
if subject to the slightest shock ?
16. Crunchy said...
"For Mash get Smash." The canned laughter sums it up nicely!
Did you know that there are some powerful globalist marxist's (sorry 'modern liberals') that would prefer most not own property?
Let them deal with the middle class first. More handouts please David. How much will ever be enough??????
17. hpwatcher said...
I'm coming to the conclusion that there is no point in saving at all - or even having a job.
Absolutely. I wanna a baseball cap, tracksuit bottoms and a g/f called 'Shannon' or 'Chelsey'. It's a far better life being a lazy slob, having five kids and doing s*d all - problem is that there are whole cities of people like this - op norft....
18. mr g said...
@HPW " there are whole cities of people like this - op norft...."
Plenty dahn sarf as well, Southampton, Portsmouth, Basildon, Sarfend, Hastings, for starters.
19. Positivo said...
Throughout history organisations have taken advantage of vulnerable people and the situation we are in now is no different. The banks, building societies and mortgage brokers will sell anyone anything to make a pound..... And they did, regardless of how intelligent they are.
The sad thing is it’s the scoundrels who are winning now and the vulnerable who are suffering.
20. enuii said...
Mr G, we also die 2 years earlier 'op norft' which is great for pension liabilities, plus most of the bone idle also drink, smoke and eat themselves to death even earlier irrespective of where they are.
21. drewster said...
What Cyril says. You can make a survey say anything.
Favourite video clip of all time (even better than kittens on a slide):
22. tyrellcorporation said...
@Alan 9.
@ tyrellcorporation,
CFEB are not a "weird body". They were part of the FSA till a few months back, when they were split off under the Financial Services Act.
Alan, I'm sure they're very useful and worth every penny. I can imagine hoards of UK citizens turning off Gladiators on a Saturday night and instead turning on their PCs to page through the CFEB website.