Interest Rate Rises Bigger Borrower Fear

Interest Rate Rises Bigger Borrower Fear.

The Building Societies Association has released figures that one in four people are worried about interest rate rises and the effect it will have on them and their ability to pay their mortgage.

Concerns are heightening that the Bank of England could be the first central bank to increase interest rates after 4 years, where the US and Europe may leave theirs lower.

This is because the UK economy is recovering faster than predicted and fears are that the Bank of England will increase rates sometime in 2014.

Comment

This may be great news for hard hit pensioners and savers who want higher returns on their cash deposits.

For borrowers though, it is a concern of they have variable rate and tracker rate mortgages.

We all know that this sustained period of lower interest rates must come to an end.  The key is to plan now.

What should you consider?

• If you are not locked into a mortgage rate, ask your mortgage lender what their current fixed rates are.
• Start to budget for higher rates, review your spending budget and pay more of your mortgage today.  This has a double benefit: 1.  It gets you used to paying more each month 2. It starts to reduce your outstanding mortgage balance which can only be beneficial when rates rise (if you owe less).
• Contact us about a quick and free mortgage search, to compare your mortgage product and lender to what is available in the open market.  For Gold and Platinum clients, we will let you have the full research at no cost, for new clients, we will do an initial search for you are no cost, but will not release company names (until you become a client) but we will try and help you identify whether it is cost effective for you to change lender.