Important:

This article is for information purposes only.

Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

Lenders warn on rising mortgage rates

Lenders



According to BSA, someone who took out a two-year fixed rate mortgage for $159,525 in 2020 is likely to find their monthly payments increase by an average $96

Lenders have warned that rising interest rates will add hundreds of pounds to monthly payments for households already struggling with other bills.

Paul Broadhead, of the Building Societies Association, said: As people roll off fixed rate deals, their payments will go up. In isolation it may not be a huge issue for many households but the problem is that it’s not in isolation.

Three-quarters of mortgages are on a fixed rate. However, 1.3 million of them come to an end this year.

Owners will find higher mortgage rates as they come to sign new deals.

According to the association, someone who took out a two-year fixed rate mortgage for £130,000 ($159,525) in 2020 is likely to find their monthly payments increase by an average £79 ($96) if they agree a new two-year deal now. This is a rise of £948 ($1,163) over a year.

If they have a mortgage for £260,000 ($319,051), their payments will rise by £158 ($193) per month, or £1,896 ($2,326) per year. The precise sums can vary.

A homeowner who took out a five-year fixed rate mortgage for £130,000 ($159,525) in 2017 is likely to find their payments increasing by £35 ($42) a month, or £420 ($515) per year, if they agree a new five-year deal now.

Mr Broadhead said: Consumers are worried. Every household across the UK is starting to feel the pinch.

He said: The fact is, everything is going up and the mortgage payment is another thing people have to cope with.

Important:

This article is for information purposes only.

Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.



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