Buy To Let
Half of homeowners could struggle with 3% rate rise
Almost half of mortgage borrowers think they would might struggle should interest rates rise three per cent.
Such a rate rise would leave homeowners on the hook for an additional £150 per month for every £100,000 owed. According to research by Ocean Finance 38 per cent of homeowners said they could potentially struggle under the increased financial burden, while 7.9 per cent said they would definitely have difficulties and would need to sell their property immediately.
The Bank of England base interest rate is currently at a historic low of 0.5 per cent, but even so one in ten homeowners are behind on their mortgage payments. A further 19 per cent are up-to-date but struggling.
Ian Williams of Ocean Finance said: “Clearly it is likely to take a while for rates to rise by three per cent. But if they do go up by that much over the next couple of years it’s worrying to hear that nearly half of mortgage borrowers are concerned about how they would keep up with repayments – especially when one in ten are already behind.”