Many to Remortgage After Rate Increase

Many to Remortgage After Rate Increase.

Research from TSB suggests that 7 out of 10 homeowners are unprepared for increases in mortgage payments when anticipated interest rate increases coming into play in 2016.

Monthly mortgage payments will increase and their research suggests that one in five do not know what the impact will be of even just a small rate rise on their monthly payments.

In addition, more than half of people are already struggling with monthly bills and the TSB research suggests that 4 out 10 people will consider remortgaging to a cheaper rate.

Worryingly, 14% may need to seek help from debt counselling groups.

Comment

The above results are a clear indication that the British public is unprepared for rate rises. Many homeowners have only ever known a period of low interest rates and have forgotten those heady days when interest rates were over 10% and mortgage repayment rates were at 15% and 16%, as in the late 1980s. Even historical averages have interest rates over 8% per annum and we should all plan for mortgages to become more expensive over the coming years.

You should start planning now. We suggest that you start making overpayments to your mortgage today to get you used to and budgeting for higher mortgage and loan costs in the coming years.