Would you struggle with debts if mortgage interest rates went up? Over 5 million UK households would…
A staggering 5.4 million UK homeowners would not be able to afford a rise in interest rates according to new research from Shelter, the housing and homeless charity.
Repossessions are down slightly so far this year but housing experts and charities are warning that homeowners are still at risk if interest rates increase, putting further pressure on their household finances.
Chief executive of Shelter, Campbell Robb said: “Some 5.4million mortgage holders haven’t even thought about how they will pay their mortgage if interest rates go up. We know for a significant number of people, just keeping on top of their current mortgage repayments is a constant struggle.”
Homeowners with discounted and tracker mortgages will face the biggest increase in their monthly repayments if interest rates increase. These are the borrowers who have been able to take advantage of all time low rates, many of whom will have been paying less than 3% interest.
The number of people in mortgage arrears also fell during the first quarter of the year according to figures from the Council of Mortgage Lenders; 9,800 people lost their homes in this first quarter of 2010 which is 8 per cent fewer than the previous quarter and 26 per cent below the same period last year.
Craig Gedey, Marketing Manager at Debt Advisory Line said: “Despite the falling figures reported here there are many people facing the fact that when mortgage rates increase they will struggle to keep up with repayments.”
“Any homeowners who are financially stretched now and feel that further costs would tip them over the edge should seek advice now.”
As Debt Management Company of the Year 2008 and 2009 Debt Advisory Line offer debt advice for people with debt problems across the UK. We understand how debt affects your life and thrive on providing award winning services with integrity, empathy and confidentiality. We will review your finances and provide you with a debt management solution based on your circumstances.