A recent survey has revealed that nearly a fifth of British homeowners have admitted that the highly anticipated rate increase would see them struggling to maintain their mortgage repayments.
Economists have said that a rise could be expected in the first half of next year, due to the growth of the economy and the pace at which it has been achieved. An increase in rates would mean an increase in payments for anyone on a variable rate product. The Money Advice Service said that 19% of those with mortgages would experience difficulty in facilitating the increase in monthly payments.
Calculations showed that if people’s monthly mortgage repayments increased by £150, which equates to a 2% rise on a £150,000 mortgage, the ratio of those that would struggle rose to 47%. The survey was carried out in July, covering over 3,000 mortgage holders.
Whilst the Bank of England has remained at 0.5% for over five years, BoE Governor https://www.beaconfinancialtraining.co.uk/wp-content/uploads/2020/06/cemap-online-and-classroom-training-uk.jpg Carney has warned that the time is near for them to rise.
The Money Advice Service’s Nick Hill said:
“Mortgage holders need to be more mindful of the fact that a rise in interest rates is widely predicted – even for those on a fixed rate, as their deal will come to an end sooner or later.”
When applying for your mortgage, seeking the most appropriate advice from a CeMAP qualified professional means that you will receive an honest and transparent service that gives you the information you need on what it most suitable for your circumstances.