Do homeowners understand their own mortgages? Some Federal Reserve Board researchers looked into the question for a recent paper, and the results are sadly close to what you might expect. People have a sense of the value, but they get lost on the important esoterica:
We find that most homeowners appear to report their house values and broad
mortgage terms reasonably accurately. Some adjustable-rate mortgage borrowers,
though, and especially those with below-median income, appear to underestimate
or not know how much their interest rates could change.