Mortgage Customers Urged to Review Finances Now Before Rates Increase

25 Sep, 2014

A Building Societies Association survey revealed that one in four mortgage customers claim they will struggle to cope financially if rates increase.

The research in conjunction with Money Advice Trust said that 40% will have to cut back on holidays and meals out to cope with the additional monthly cost.

More worrying was the claim that one in five say that they will be forced to cut back on the basics including food, heating and clothing.

A spokesman for the Building Societies Association, said: “Many consumers are only used to a low rate environment which will change and whilst most mortgage rates are not linked quite so directly to the base rate as they used to be, rates will rise as it increases.

“Some of the actions borrowers say they would take may not be within their control, for example working additional hours. Our advice to those concerned about interest rate rises is to start thinking about how they will manage the increased costs.”

A spokesman for the Money Advice Trust, said: “Our message to borrowers is clear – interest rates will rise and that day is coming soon, so now is the time to prepare. Draw up a budget, speak to your lender, and if you do find yourself struggling to repay, seek free debt advice as early as possible.”