A new campaign to help people keep on top of their mortgages has been launched by the Consumer Financial Education Body (CFEB), which has taken over from the Financial Services Authority as the organisation responsible for educating consumers on financial issues.

According to CFEB research, 74% of mortgage holders don’t know how an interest rate rise of one percentage point could affect their monthly outgoings. The research also suggests that:

• Over half (51%) of mortgage holders believe interest rates will change in the next nine months
• 15% of mortgage holders don’t know what type of interest rate they are paying on their mortgage – fixed, standard variable, tracker or discounted
• 14% of mortgage holders (two million people) say they do not know what they would cut back on if their mortgage payments increased by £200 per month
• 54% of mortgage holders with a deal have no plans to review their mortgage situation, or will leave it to the last minute
• 15% of mortgage holders with a deal (around 1.3 million people) do not know when their mortgage deal expires

Entitled Stay on top of your mortgage, the new campaign provides help and advice on being prepared for a rise in interest rates or a change in personal circumstances.

CFEB chief executive Tony Hobman says, “Interest rates have been at record lows for some while now. Although there is uncertainty about when this will change, it is clear from our research that many people with mortgages haven’t thought about what it would mean for their monthly payments, or where they would find the extra money in their household budget if their mortgage rate was to go up.

“Lack of time means many of us often put off reviewing our finances, but it doesn’t have to be time-consuming to keep on top of your money matters. Our Moneymadeclear mortgage toolkit – which can take as little as five minutes – makes it easy to see where you stand, so you can plan ahead.”

CFEB’s advice to homeowners is to:

• Dig out the ‘key facts’ paperwork you received from your lender when you took out your mortgage. This shows your interest rate deal and when it ends
• Use the Moneymadeclear mortgage calculator to work out what a rise in interest rates will mean for your monthly payments
• Use the impartial mortgage toolkit at www.moneymadeclear.org.uk/mortgages. There are five-, 15- or 30-minute versions to help you give your finances a healthcheck, so you can understand your options and plan ahead

The Stay on top of your mortgage campaign toolkit includes a new cutback calculator, which shows how cutting back on small purchases can quickly add up to substantial savings, and a budget planner, which helps people see where their money is going each month, making it easier to work out where they could make changes. The impartial mortgage comparison tables help those with a deal to shop around when their term is coming to an end.

For information and advice on a range of financial issues, go to www.moneymadeclear.org.uk