As homeowners in the UK are increasing interest rates?

Due to the strong price growth in the property market across the UK, more and more talk in the press about the increase in interest rates by the Bank of England. Meanwhile, the increase in interest rates by the Bank of England will be a shock to homeowners. A poll on the subject: “How mortgage borrowers relate to the prospect of rising interest rates?” was held in the UK.

Every tenth householder in the UK has stated that he will put your property up for sale, if interest rate will rise. Today one in ten of those who took mortgage loan is behind on its schedule of debt repayment, and a third of mortgage borrowers forced to reduce all of your nonessential expenses just to make ends meet.

The Bank of England Governor mark Carney stated recently, the assumption that interest rates could rise in the next few months. This news was met with stiff resistance of mortgage borrowers, almost half – 46% – said that they will not be able to withstand the financial burden if the interest rate on their mortgage will rise to 3%.

A three percent increase in interest rates will mean that on average each borrower will be forced to pay extra £150 per month for every £100,000 loan.

Only a third of interviewed borrowers said that they need to shrink your budget, but they hope that will cope with the current situation. And every fifth borrower has even said that he sees the difficulties and cope with the situation if the interest rate will rise to 3%.

Currently, the interest rate of the Bank of England is at its historical low of 0.5%. However, even now there are homeowners who have difficulty paying their mortgage loans.

Many borrowers can withstand higher interest rates only if they become more work.

It is obvious that the interest rate is not increased dramatically and people will have time to make a decision. But now experts in mortgage lending recommend that people who are not sure they can withstand the rate hike, to benefit from professional advice and maybe switch to a fixed rate mortgage.

® Alice Morgan 08.08.2014

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