250,000 people 'need to think about remortgaging as soon as possible'
Published On 6 September 2007
Around 250,000 mortgage holders could be hit with higher rates between October and December unless they look to remortgage in the immediate future, a leading lender has warned.Nationwide has pointed out that over a quarter of a million borrowers will see their two-year fixed-rate mortgage deals mature between October and December this year, meaning that they will subsequently face higher mortgage repayments.
In the autumn of 2005, fixed rates dipped to a low which saw typical offer of just 4.56 per cent. However, these deals are about to expire and mortgage holders could see their rate jump to around 7.75 per cent as they are automatically switched onto their bank's standard variable rate.
Even borrowers who opt to remortgage are likely to face higher monthly costs, as fixed-rate deals have worsened in the intervening years. Now, the best fixed rates available are typically at a rate of around 6.41 per cent.
"For some borrowers it will come as a quite a fright to see their mortgage payments increase dramatically," warned Matthew Carter, Nationwide's director of mortgages.
"To absorb some of this shock, borrowers need to consider remortgaging as soon as their deal ends, or beforehand if their lender allows it. Those who prefer to avoid the unexpected may be thinking about fixing for a longer period."
Figures from Halifax show that house prices in the UK rose by 0.4 per cent in August and now a typical property costs £199,770.
