Vast majority of homeowners have become complacent over mortgage rate increase threat

The latest research commissioned by Callcredit Information Group has found that the majority of homeowners do not know what impact a rise in interest rates will have on their monthly mortgage repayments.

The research undertaken by YouGov looked at how much disposable income home-owners have after deducting all monthly out-goings and analysing how much of a rise in interest rates would prevent them from being able to maintain their monthly mortgage repayments. The findings have been further enhanced by Callcredit’s new CAMEO UK segmentation tool showing how these views differ across socio-economic groups.

By using CAMEO UK Callcredit was able to categorise respondents into ten different groups ranging from ‘Business Elite’ to ‘Family Value’.

When asked what levels of mortgage rise would be unsustainable?

  • 44% of ‘Prosperous Professionals’ said they didn’t even know how any increase might affect them
  • 33% of the ‘Cash Conscious Communities’ and 32% of those ‘On a budget’ also agreed that they didn’t know how any possible increase would affect them


  • 41% of the ‘Business Elite’ believe that an increase above 3% would leave them in financial difficulty

When asked on average how much disposable income, after deducting all outgoings, did homeowners have each month?

  • 51% of those ‘On a Budget’ confirmed they had less than £200pcm
  • 39% of ‘White Collar Neighbourhoods’ also said they have less than £200pcm left
  • 26% of the ‘Business Elite’ as well as 30% of ‘Family Value’ group confirmed they have up to £500pcm

These particular findings show that a large proportion of households’ who currently have less than £200 disposable income left at the end of each month, will see any rise in interest rates hitting them hard and could leave the majority in financial difficulty.

Chris McDonald, Managing Director at Callcredit, commented “As a growing number of industry commentators are predicting that interest rates are expected to rise in the near future it’s interesting to see how different social groups perceive how such rises may affect them and which of those are  better  financially prepared to cope with them”.

“It’s also surprising to see that it’s not just the less affluent consumers who are unaware of the impact of interest rate rises. Our research also showed that 44% of ‘prosperous professionals’ seem to have paid no or little attention as to how this might impact them.

Chris added, “With some groups having little spare cash to absorb interest rises and general rises in the cost of living it’s important for lenders to be aware of this wide reaching inertia so that they are best placed to understand which customers might be better suited to specific products and services”.

*All figures, unless otherwise stated, are from YouGov Plc.  Total sample size was 2,010 adults. Fieldwork was undertaken between 28th – 29th August 2014.  The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).