Mortgage lending is on the up as most people know.
However, the lack of interest rate rises appears to be lulling borrowers into a false sense of security.According to the Council of Mortgage Lenders, the total number of mortgage loans for July 2002 was 147,000 which is the highest on record.
Of these mortgages, 82% were set up on a variable rate.Variable mortgage rates move up and down with general interest rates.
The problem we see is that borrowers have to stretch themselves enough to afford homes at the moment.
If interest rates go up, so will the repayments and this could be dangerous in terms of affordability. It is always advisable to look at all rates on offer and choose the one most appropriate to your personal circumstances. Think about the scenario of interest rates rising and how you would manage financially. Find out what a 1% interest rate rise would mean to you.