Louise Cuming, head of mortgages at www.moneysupermarket.com, has warned of the impact of next next week's expected rise in interest rates.
Quote:
"The looming rate rise is of grave concern. We feel it could even be a 0.5 per cent rise, which will drive an alarming number of people into financial difficulty.
Home owners on a £150,000 interest-only tracker mortgage face additional costs of £750 a year, or £62.50 a month, for every 0.5 per cent that interest rates rise.
Assuming the May rate rise is 0.5 per cent, many borrowers will have their mortgage repayments rise by 1.25 per cent over the last 12 months - an increase of £156 a month, or £1,875 a year."
Moneysupermarket.com claim, based on research that they have carried out, that 14% of households would be forced to refinance their loan if a rate rise led to a mortgage repayment increase of up to £50 a month.
Around 40% would remortgage their home if monthly repayments went up by £100.
No comments:
Post a Comment