Some homeowners with mortgages may need to find close to £600 a year by the end of 2015 if the Bank of England increases the base rate as much as forecast.
Research from the Centre for Economic and Business Research (CEBR) suggests that if the most "drastic scenario" occurs – with the rate hitting 1.75 per cent by December next year – the average homeowner will face a £576 annual increase if they are on a rate which changes in line with the Bank of England base rate, this increase works out as £48 a month.
That`s the worst case possible, but even if the bank rate only goes up by 1.25 per cent – which is a more likely scenario – mortgage holders will still need to find an extra £252 a year to fund their repayments.
Barclays worked with the CEBR to produce the Financial Flexibility report, and managing director of mortgages, Andy Gray, notes that "in the face of a rise in mortgage rates and in the cost of living, it is vital for homeowners to review their current situation and get advice as to what their next mortgage step should be".
Even if there`s no immediate change in the bank rate, some homeowners or mortgage payers may still want to think about a remortgage, as the report shows that for 20 per cent of the households with the lowest incomes, more than half of their income goes on home loan repayments.
If you`re finding that paying your mortgage off doesn`t leave you with enough money left over each month, or if you`re concerned about the increase in the base rate affecting your payments, First Choice Finance can look at the lenders on its panel to see what alternatives may be available.
Our qualified advisers will scour our mortgage and remortgage products to find a suitable deal for your circumstances so you don`t need to pay any more than is necessary. Get in touch via firstchoicefinance.co.uk, dial our finance team from your mobile 0333 003 1505 or from a landline on 0800 298 3000.
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