Homeowners - prepare to pay £1000 more a year
Looking forward to interest rate rises? No? Well, you’ll want to bury your head in the nearest bucket of gin when you hear that - potentially - homeowners might have to pay more than £1000 more a year than they do now.
That’s according to a report by estate agents Savills, who calculated that if the base rate went up from 0.5% to 1.5%, that means cash strapped homeowners on an interest only mortgage will have to find an average of £1,312 for the pot.
And if you’ve got a capital repayment loan, you will have to magic an extra £872 from the back of the sofa.
Interest rates might go up by the end of the year, although the Bank of England has promised that the rise will be ‘gradual.’ But if it does go up by 1%, or even to 2%, it will push affordability to the limit and your mortgage alone will constitute over 20% of your earnings. That was the exact situation in 2007, before THE CRASH.
So when will interest rates rise? When do we have to prepare our nooses? Only Mark Carney knows. But for homeowners, it is written in the wind - Winter Is Coming. Better start your dodgy webcam business now and earn some £££s from home.