Majority of British homeowners unaware of interest rate rise impact
There has been speculation in the property market for some time that the Bank of England could soon have a significant impact on repayment prices as a result of growing interest rates. As some lenders start to withdraw their lowest rates, it would seem that this is now closer than ever to becoming a reality.
However, even as we face rising interest rates coming true at long last, the vast majority of people who own homes across the UK seem to have little knowledge about what impact it will have on them.
According to research from lender TSB, as many as 68 per cent of people who own a home in the UK don't know how a base rate change would affect their monthly repayments. It also said that most homeowners nationwide do not seem to know that fixing their rates could save them money in the case of rates rising.
TSB said that an interest rate increase of just 0.25 per cent by the Bank of England could see those on variable rate mortgage products paying as much as £13 more per month than they do at the moment. At the same time, it said that those who fix their rates at present could eventually be saving themselves as much as £119 per month.
The lender said one of the biggest issues is that there has not been an interest rate rise in the UK for ten years. In that period, as many as 2.6 million people have got onto the housing ladder, leaving a large number of owners who have never had to experience changes that could negatively affect them.
"We don’t know when the Bank of England will change the base rate, but we do know that preparing early is the first step in helping homeowners to get ready for a rate rise. There’s no need to panic and no one is suggesting sudden large increases in the base rate but just a little planning now can make a big difference in the future," said Ian Ramsden, director of mortgages at TSB.
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23-October-17General Lettings News