You are here: Home - Mortgages -

Bank has ‘room to raise interest rates’ without hitting borrowers

Written by:
The Bank of England (BoE) could increase interest rates a "fair amount" without hurting homeowners taking advantage of the government's Help to Buy scheme, according to one of its policymakers.
Bank has ‘room to raise interest rates’ without hitting borrowers

The BBC reports Ben Broadbent, who sits on the Monetary Policy Committee (MPC), has said rates could go up a fair amount before “borrowers got into great difficulties”.

Concerns over potential rate rises have been mounting as signs of a housing market bubble re-emerge.

An upswing in prices, caused in part by the Government’s scheme, has spooked fears that borrowers are once again over-extending themselves and could be caught out if rates suddenly rise.

However, Broadbent stressed a rate rise would not be allowed to “choke off” recovery.

Rates would only increase if the economy was in good health, or if inflation was out of control, Broadbent said. “We want to ensure that this recovery continues and is not choked off by a premature rise in interest rates,” he told Sky News.

The base rate has been at a record low of 0.5% since 2009.

A rise in rates would mean hiked mortgage payments for most homeowners who are not on fixed rates, which could lead to a rise in repossessions should people be unable to afford their monthly payments.

But Broadbent added: “I think their is a fair amount they could go up before borrowers got into great difficulties.”

Tag Box

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

Coronavirus and your finances: what help can you get in the second lockdown?

News and updates on everything to do with coronavirus and your personal finances.

Everything you need to know about being furloughed

If you’ve been ‘furloughed’ by your company, here’s what it means…

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
Monday newspaper round-up: Housing market, Lloyds, Hinkley Point

London house prices rise 10% in a month; David Cameron plans to build on Royal Mail with more sell-offs; UK...