Homeowners late for a very important date
770,000 homeowners may struggle to renegotiate their mortgage rate once rates start to rise, new research has revealed.
Base rates are expected to rise early next year and, according to independent think tank The Resolution Foundation, would leave one in 10 households trapped by unaffordable repayments.
Yet homeowners remain as sleepy as the Dormouse in Alice in Wonderland when it comes to remortgaging.
Who’s most at risk?
According to the Resolution Foundation study, homeowners in London and eastern England are the most vulnerable to any kind of rate rise with an estimated 35 per cent of households having to spend at least a third of their disposable income on their mortgage. This is compared to 19 per cent in Yorkshire and the Humber.
Lynne McCaffrey, Head of Property, comments:
“For six years homeowners have benefitted from low monthly rates. However it is now a case of when, not if, the Bank of England base rate will rise – forecast as soon as early next year – many households on a standard variable rate are likely to see their mortgage repayments soar.
“As a result hundreds of thousands of homeowners will not only struggle to meet these escalated charges but also face difficulties securing a new lower rate.
“Homeowners should therefore start investigating their remortgage options sooner rather than later or risk falling down the rabbit hole.”
Content correct at time of publication