The report also revealed that 46% can't remember what the current BoE base rate is, 61% have no idea when they might rise and 88% are completely unaware of BoE’s recent interest rate forecast.
As a consequence, a reported 76% aren’t putting money aside for the rate increases. This is despite CEBR predicting a minimum total mortgage payment rise of £723.8m across the UK.
Homeowners cited different political and regulatory statements in the study, conflicting family views and changing market commentary as the main reasons behind this widespread uncertainty.
This lack of awareness could contribute to UK mortgage holders experiencing financial difficulties in 2015, as CEBR predict that homeowners could face a potential £1.1bn total increase in mortgage repayments by the end of the year.
This is based on CEBR’s ‘sharp but potential’ model suggesting three rate rises in 2015 (taking base rate to 1.25 percent by December 2015).
Even a single interest rate rise of 0.25% in May 2015 and would see homeowners across the UK paying an additional £101.33 on average.
At a very minimum CEBR predicts an average annual £81.12 increase in mortgage payments for individuals by the end of 2015.
The survey also found 45% of homeowners felt they may have missed out on better mortgage rates and therefore paid out more because they weren’t sure whether or not to fix or change their mortgage.
Those between the ages of 30 and 49 face the largest hike in mortgage repayments, with a potential £362.1m increase in total mortgage repayments.
Regionally, those in South East can expect the biggest rise in payments with a total of £158.9m.
Scots are least likely to put money aside for potential interest rate rises, with only 10% saving for their mortgage repayments going up. Welsh homeowners are most likely to save, with a third putting aside money even though their potential mortgage increases not being as large as other areas in the UK.
However, CEBR have predicted that London's homeowners can expect a reduction of £20 on average per person on their mortgage repayments by the end of next year. However, when taking the region as a whole, total mortgage repayments increase by £124m as the number of mortgage paying households in the capital increase.
