A quarter of home owners in the UK have benefited from lower base rates but now on the third anniversary since rates dropped to a record low of 0.5%, research indicates many are concerned about a rise.
Already one major mortgage lender, the Halifax, has announced it is increasing its standard variable mortgage rate from 3.5% to 3.99% in May despite the Bank of England rate remaining at 0.5%.
‘Over the last three years, some borrowers have benefited from the low interest rate environment with reduced monthly mortgage repayments. However, with the high cost of living, including bills, food and transport costs, many have been forced to use the extra cash from their reduced mortgage repayments to bridge the gap of their shortfalls for essential outgoings,’ said Clare Francis, mortgage spokesperson for MoneySupermarket which carried out the research.
The research also found a future base rate rise would have a real impact on home owners’ finances, with over a third, 35%, stating they would be worse off if it were to increase, and a further 26% stating they would have to make cutbacks to their day to day spending.