- 20
- Feb
Thousands of us are facing the risk of being unable to meet our mortgage repayments in the coming months as the recent increases in interest rates finally start to be felt.
There have been five rate rises over the past twelve months and although the base rate dropped in December, the prior rate rises have added roughly £135 a month to the average mortgage in the London and the South East, where mortgages are on average £180,000.
The problem for many of us is that we are not only trying to repay our mortgages but also meet loan repayments and credit card bills, which have also seen interest rate rises.
Last year saw the highest number of house repossessions by lenders since 1999 with 27,100 of us seeing our house being repossessed. That’s a 21% rise on the level of 2006, and could be a warning for what’s to be expected in the next few months.
Michael Coogan, CML director general, said: “The number of repossessions is likely to be higher in 2008 as a result of wider issues in the economy and the mortgage funding markets.”
The reason so many of us have been caught out is because interest rates are far higher than many of us expected when we took out the loans. Financial experts are advising anyone who finds that they are struggling to make monthly repayments to not wait and see what happens, but rather act now before it is too late to do anything.
The spring is expected to send many of us who borrowed low rate fixed loan deals between 2002 and 2005 into financial difficulty as many of the deals are expected to expire shortly.
