Homeowners with a mortgage of £100,000 have seen their monthly repayments rise by £16 on average after interest rates rose on 10 May, the fourth rise since last August. With some experts predicting the Bank of England Base rate will rise before levelling out, homeowners in Wales may soon feel the pinch.
Many local families have already been negatively affected by the rise in interest rates, while mortgages which are not fixed are the most likely to be affected, with some families, paying an extra £83 a month since rates began to rise. A rise to 6% may increase the financial hardship, with the threat of reposition a real possibility.
The Shadow Monetary Policy Committee, a group of economists from academia and financial firms, recently voted to hold interest rates at their current rate of 5.5%. However, three of the eight members want a quarter-point rise now, and Sunday Times Economics Editor David Smith reported an “overall bias to raise rates in the near future”.
My advice to anyone who feels they may have difficulty in keeping up with mortgage payments would be to contact your lender before they contact you. Your lender has a duty of care to advise you on your options with repossession always being the last resort.
Speaking to John Quesy, Director of Shelter Cymru, agreed that higher interest rates will have ab adverse effect on Homeowners with Mortgages in Wales.
By considering the affordability of a mortgage before committing yourself, interest rate rises should not have a detrimental effect on your finances. If you prefer knowing the exact monthly payments you should consider changing to a fixed rate mortgage where payments are fixed for a set period of time.
Daniel Morgan
If you have any questions for Daniel or would like to discuss your mortgage needs please feel free to visit www.fruitmortgages.com, email info@fruitmortgages.com or call 01685 873238.You can contact Shelter Cymru on 0808 800 4444 or visit www.sheltercymru.org.uk.
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