Homeowners cautious about further interest rate rises

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by Kay Murchie

The Council of Mortgage Lenders have established that 4 out of 5 borrows are going for fixed rate mortgages – this is the highest level for over 15 years, which shows that borrowers are getting anxious.

Capital Fortune Independent Mortgage Advisers have also specified that 78% of homeowners are cautious about further interest rate rises.

Industry experts have noted that 25% of UK homeowners are overpaying on their mortgage. To many, re-mortgaging is a lengthy process and meaningless. However, in view of soaring interest rates, it is estimated that this could change. Homeowners are advised to see whether their payments can be reduced by seeking independent advice.

In April 2007, the average property price in London stood at £351,028, interest payments on a mortgage this size will have risen from £1,167 in 2003 to an astounding £2,190 today. If the borrower stays on this variable rate, it is an increase of over 85%.