The Bank of England (BoE) is stating that it expects rates for approximately 40% of all existing mortgage loans in the UK to go up during the course of the next year.
Sarah Breeden works for the BoE as its Executive Director for Financial Stability Strategy, and she told a recent meeting of the Treasury Committee that 20% of the mortgages in the country will have their interest rates rise pretty much straight away. According to Mortgage Strategy, she then went on to say that:
“Of the 80% that are fixed, our data suggests that around a quarter of those come out of that in the next 12 months. Of that 100% stock of mortgages actually only 40% are going to see higher rates in the immediate period ahead.”
Breeden pointed out to this committee that 80% of people with a mortgage right now are on fixed-rate ones, and that rises in interest rates were going to happen slowly in many cases.
She concluded by saying that a combination of assistance from the government and a strong market meant that most UK households would not be facing worse debt situations by the close of this year than they were at the beginning.
The bank is also stating that it does not expect repayment difficulties to reach the stage that they did in the midst of the 2008 financial crisis.
Advisors will still need to use CeMAP training to find deals that can help clients struggling with rate rises.
