Rate rise could increase monthly mortgage cost by 25%
Founder and CEO of eMoov.co.uk Russell Quirk has provided predictions for the coming year, and believes that interest rates will increase by around 1.5% over the course of 2015.
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He stated that he was "surprised that they haven’t done so already" following Mark Carney's claim that a rise was imminent following unemployment levels dropping below 7%, which happened earlier this year.
Russell Quirk said:
"[1.5%] is still historically low but when added to the current mortgage rates of 4% it could increase the monthly cost of a mortgage by as much as 25%. A significant increase for the average Joe."
Recent research by Aviva revealed a 7% increase in fears surrounding rising mortgage rates, with more than a quarter of the population listing this as one of their top three financial concerns.
Additionally, a third of UK mortgage borrowers would not be able to afford their repayments if they increased by £100-£199 a month, according to research by Legal & General Mortgage Club.
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