Is 2015 the year of the base rate rise?
The Bank of England base rate could rise by 1.5 per cent over the course of 2015, Founder and CEO of eMoov.co.uk, Russell Quirk, has predicted.
Mr Quirk believes a base rate rise is imminent and is surprised ‘they haven’t done so already’ after a drop in unemployment levels of 7 per cent.
What does this mean for homeowners?
If the base rate was to increase homeowners on tracker mortgages would see an immediate increase to their mortgage repayment while those on a standard variable rate (SVR) mortgage (the rate you automatically go onto when your current mortgage deal ends) would also be likely to see a hike in their monthly outgoings.
Mr Quirk has calculated a rise of 1.5 per cent could increase mortgage repayments by up to 25 per cent.
Rising mortgage rates are already a growing concern for many homeowners with more than a quarter listing it as one of their top three financial concerns. These fears are very real for homeowners; one in three could not afford their mortgage repayments if they were to rise by £100-£199.
A possible solution
Homeowners on an SVR mortgage may want to start looking at their remortgage options to try and secure a fixed rate mortgage before a rate rise.
Remortgaging is when a homeowner switches their mortgage from one lender to another, often to get a better rate.