Talk of rate increase baffles borrowers

January 14, 2015 by Brendan O'Neill

Rates

A recent poll has revealed that as many as six out of ten borrowers are completely confused as to when the Bank of England may start to increase it rates, following the all-time low rate of 0.5% that it currently sits at.

Borrowers across the country have been subjected to opinions from many different fields, politicians, regulators and even from members of their own families, which has added to the ‘who to listen to’ confusion.

The poll surveyed 2,000 property owners, and also found that even though many of them were on mortgage products that were linked to the base rate set by the Bank of England, they did not know what the current rate was when asked.

Carried out by the Centre for Economics and Business Research for Barclays Mortgages (Cebr), the survey also revealed that over half of the borrowers polled did not anticipate their payments would be increasing in 2015. Cebr has predicted that, should the Bank of England start to increase the base rate, homeowners’ mortgage payments could increase annually by up to £81.

Estimates within the industry indicate that close to one million mortgage holders, having taken their first steps onto the property ladder during the all-time 0.5% low, have not yet experienced a change in the interest rate.

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