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Top advice for mortgage borrowers
The Monetary Policy Committee is due to meet on Thursday September 9th leaving many people nervously awaiting their interest rate decision.
With two conflicting views of what may happen it is very difficult for borrowers to predict the next interest rate change and therefore decide which type of mortgage to apply for.
Unbiased.co.uk has given mortgage borrowers its top tips on how to choose the right mortgage if interest rates remain the same or increase as many experts believe they will do, possibly reaching eight per cent by 2012.
Bob Riach of Riach Independent Financial Advisers said that the interest rate has remained at its lowest level for a long time and it inevitable that it will rise so people with a variable rate mortgage will see their repayments rise significantly.
Ray Boulger of John Charcol said the difference between a tracker and a five year fixed-rate mortgage at the same loan to value is in the region of two per cent and so for a five year fix to work out cheaper than a variable rate the interest rate would have to average more than 2.5 per cent over the next five years.
Karen Barrett, chief executive of unbiased.co.uk, said: "Should the committee opt to increase interest rates, homeowners may find that pressure on their finances increases as their monthly mortgage repayments rise."