Millions of homeowners urged to prepare now – figures shows impact of interest rate rises | Personal Finance | Finance

0

Figures from credit app TotalMoney show the average UK property worth £270,708, with a 75 percent LTV, would see monthly repayments rise by £78, if the base rate increases by 0.75 percent tomorrow. This would also mean the average customer would be paying out an extra £274 a month compared to repayments in 2021.

Buyers looking for a fixed rate deal are also facing growing pressures, as the average two-year fixed rate offer is at 4.09 percent, its highest since 2014.

This is how much monthly payments could increase depending on how much Bank of England bosses decide to change interest rates tomorrow

Mortgages for homes worth £150,000

0.25 percent – £18

0.5 percent – £37

0.75 percent – £56

1 percent – £75

READ MORE: Housing market set for ‘rollercoaster ride’ as prices surge

One in three mortgage customers in the UK fear that rising interest rates mean they cannot afford their repayments, according to research by Butterfield Mortgages.

The survey of 2,000 UK adults found that a third (33 percent) of mortgage holders believe the interest rate hikes over the past year have made their mortgage repayments unaffordable.

Alastair Douglas, CEO of TotallyMoney, said: “Another increase to the base rate will pile pressure on the finances of over two million homeowners who may already be struggling with the soaring cost of living.

“With inflation currently sitting at almost five times the Bank of England’s two percent target, it’s clear that something needs to be done — but is this the way?

READ MORE: Woman saved hundreds by challenging council tax band

“The latest interest rate hike is being closely followed by a new, higher energy price cap, further compounding pressure just as we head into the cold winter months.

“People’s finances are being squeezed more than ever and the Government, regulators, lenders and fintechs need to act quickly to protect people from being pushed to the edge as they risk missing repayments and potentially losing their homes.”

He urged people on fixed rate deals to plan ahead for when their scheme finishes.

The financial expert said: “The three million homeowners whose deals may be coming to an end in the next two years can start preparing now by making sure their credit report is in a good place.

“Lenders will usually refer to this information to assess a customer’s ability to manage mortgage repayments, and the best deals are often reserved for those with the best scores.”

Andrew Hagger, Personal Finance Expert at Moneycomms.co.uk, said the seventh increase in interest rates shows how inflation has become a huge issue.

The base rate is currently at 1.75 percent, with some analysts warning it will rise by at least 0.5 percent.

Mr Hagger said: “Mortgage borrowers approaching their fixed rate renewal are in for a massive shock when they see the eyewatering increase in their monthly repayments.”

“Facing hundreds of pounds extra in mortgage repayments on top of soaring food, fuel and energy costs means some borrowers will face a serious monthly budget deficit.”

FOLLOW US ON GOOGLE NEWS

 

Read original article here

Denial of responsibility! Samachar Central is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – [email protected]. The content will be deleted within 24 hours.

Leave a comment