The Bank of England this week announced the findings of its study into mortgage affordability if interest rates were to rise from their historical low of 0.5%, to 2.5%, in the medium term.
Although the report suggests that just 4% of mortgage holders would need to take action if rates increased by that amount, those statistics made the presumption that a 10% increase in household income would occur over the same period.
Worryingly, if wage rises failed to keep in line with increasing mortgage payments, the proportion of mortgage holders who felt they would face difficulties keeping up with their payments rose to 37%.
The Bank felt that; “These results do not imply that increases in interest rates from their currently historically low level would have unusually large effects on household spending,” however, many home owners will be concerned about their own circumstances if rates were to increase, and may be looking to a fixed rate mortgage when they are able to re-mortgage or move home.
Steve Padgam, Mortgage Manager at The Financial Planning Group, has access to the best fixed-rate deals across the whole industry and feels that; “Fixed rate mortgages look very good at the moment, they may get cheaper, but probably not by much. If you could benefit from remortgaging, now looks like a good time to think about it.”
If you would like to talk about fixing your mortgage rate, or if you are buying a property, or considering re-mortgaging, please give Steve Padgham a call on 020 8614 4782 or e-mail him at firstname.lastname@example.org He’ll be delighted to find the mortgage that’s perfect for you.