Some 7% of home owners in trouble if rates rise
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Some 7% of mortgage holders say outright that they won’t be able to meet their required repayments if interest rates go up, shows research from insurance firm MarketGuard.
While 46% of mortgage holders say they would be worried about their finances if their mortgage repayments increased as a consequence of base rate rises.
Three quarters of mortgage holders are anticipating interest rates to rise in the next twelve months, 59% of mortgage holders are anticipating a rate rise of up to two and a half per cent, and 15% are expecting rates to rise by more than 2.5%.
Mortgage holders are more likely to expect a rate rise than the wider public, of whom 63% think the next twelve months will see rates increase.
Chris Taylor, CEO of MarketGuard, says: “This research underlines the extent of exposure the British public has to interest rate risk. It is clear that we face a major problem if rates start to move dramatically upwards in response to inflationary pressure. Nearly half of the UK’s mortgage holders would feel the squeeze heavily and there can be little doubt that defaults and repossessions would increase.
“There are millions of mortgage holders in the UK who are unable to find a suitable fixed rate deal, and so remain at the mercy of financial markets. Fixed rate deals are popular because people want to know their repayments won’t go through the roof if rates rise, MarketGuard offers this same assurance to those who are unable to find a fixed rate deal.”
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