Nothing lasts forever: half of British homeowners fear interest rate rise
According to research from comparethemarket.com, 55pc of home owners are concerned about the prospect of interest rates rising.
On average, they expect to pay £590 (973 USD) more a year on mortgage repayments if interest rates rise by 0.5p percentage points compared to their current low of 0.25pc.
Given that there are 11.2m home owners with mortgages, this means that households face paying out a combined £660m (1 bln. 89 m USD) more each year.
The survey highlights the risk posed to the British economy by a rise in interest rates and the dilemma facing rate-setters at the Bank of England.
Last week minutes from the Bank revealed that two members of the Monetary Policy Committee, Martin Weale and Ian McCafferty, voted in favour of a rise in interest rates. This was the first time there has been dissent the MPC since July 2011.
Despite the concerns among more than half of home owners, the survey revealed that one in three home owners are unaware of the potential increase in interest rates and one in four are unaware of how interest rate rises will affect their finances.
It also found that 60pc of consumers have taken no steps to prepare for the increase in monthly repayments.
Simon McCulloch, director of insurance at comparethemarket.com, said: “Low interest rates may have spelt bad news for savers since 2008, but mortgage-paying home owners have really benefited. Our research has shown that, on average, mortgage repayments have been £112 (185 USD) less per month for every household since 2008. However, nothing lasts forever.”
Comparethemarket.com said that while interest rates remain low, property owners are looking to remortgage. It said that over 42pc of all mortgage enquires to the price comparison website are about remortgaging.
By Graham Ruddick, telegraph.co.uk