Rate rise will hurt homeowners
May 11, 2007 by admin
Filed under News, News-Mortgages
The fallout from yesterday’s (May 10th) interest rate rise is being felt today, with many organisations warning that the increase could leave homeowners in the red.
The Bank of England announced that the base rate would rise by 0.25 per cent, taking it to 5.5 per cent – the highest it has been since April 2001.
Experts are warning that those with a mortgage are likely to suffer the most, especially as more and more people are taking out loans that stretch them to the absolute limit.
As house prices continue to grow and buyers take out mortgages which leave them financially stretched, Citizens Advice is warning that this latest interest rate rise may tip some homeowners over the edge.
“Today’s interest rate rise will put added pressure on some homeowners. Our evidence shows it only takes a very small change in people’s circumstances to tip them from manageable credit commitments into serious debt,” said Peter Tutton from the organisation.
“Citizens Advice is seeing a rapidly growing number of people falling behind with mortgage payments and in some case threatened with repossession.
“Housing debt is one of our fastest growing problems and it increased by 20 per cent in the last year,” he added.
Borrowers are being advised to talk to their lender if they are struggling to make payments, while those considering taking out a mortgage should check thoroughly that they can afford it.
