Close to 35 percent of mortgage-holding Americans are unsure of the rate of interest they are paying on their mortgages.
A survey of 1,000 people by Princeton Survey Research Associates International, commissioned by Bankrate.com, came up with that finding along with a couple of others that might surprise:
- Three in five polled said that they would rather own a house than rent, even if mortgage rates increased a full percentage point above where they currently stand.
- One in three polled said they would consider buying a house even if the 30-year fixed rate were to climb to 10 percent or higher.
While these findings indicate that Americans are more confident about positive aspects of homeownership despite concerns raised by the 2008 housing crisis, they also may indicate a false sense of security rooted in individuals not knowing what increases in rates would mean for their finances.
Depending on the rate, higher interest rates can drastically increase the amount a mortgage owner has to pay on a loan.
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Not knowing the interest rates on their mortgages also prevents owners from taking advantage of opportunities to refinance during periods of low rates.
According to the Bankrate study, the average interest rate over the last year on 30-year fixed mortgages was 4.24 percent.
While 65 percent of those surveyed in the Bankrate study claimed to know their mortgage rates, this percentage may have overstated how many actually know the numbers, according to Jim Sahnger, a Florida mortgage planner quoted in the Bankrate news release.
Sahnger indicated that while mortgage owners may claim to know their rate, often the number they give does not match with what appears on paper.
"They may have a general range, but they don't know exactly," Sahnger said.
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