Homeowners ’shaken by interest rate hike’
The three interest rate increases between August 2006 and January 2007 have shaken homeowners, it has been revealed.
Homeowners are expecting further increases, with tracker mortgages falling in popularity and fixed-rate options becoming more viable, according to The Motley Fool.
While interest rates have traditionally been of more concern to first-time buyers than remortgagers, the body has added that the latter are now beginning to show similar caution.
In accordance with this, eight out of ten remortgagers are choosing against variable rates - to insure against a future base level increase, it added.
But borrowers should resist the urge to risk their homes by attempting to second guess the direction in which rates will go, commented David Kuo, the company's head of personal finance.
"Fixed-rate mortgages are the best way for homeowners to insulate themselves from rate rises. It’s ideal for people who need to know where they stand financially from pay packet to pay packet," he said.
A report from Mform.co.uk last week suggested that 87 per cent of buyers needed a mortgage in order to purchase property.
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