Many homeowners 'heading for a mortgage rate shock'
Published On 2 April 2008
A significant number of homeowners in the UK will face significant increases in their monthly mortgage repayments when their current deal comes to an end, a new study has warned.Financial website Fool.co.uk carried out research which found that 70 per cent of homeowners face the prospect of more expensive mortgages when their existing fixed-rate deal expires.
It added that 1.4 million fixed-rate deals are due to come to an end over the coming months.
The site calculated that mortgage rates will jump for the average homeowner from 4.8 per cent to 6.3 per cent.
David Kuo, head of personal finance at Fool.co.uk, explained: "Many homeowners will feel the full force of the credit crunch when their special-rate mortgage deals come to an end. For a lucky few, another good deal will be just around the corner.
"However, a significant number of homeowners will find that the myriad of choices that were once available has shrunk to no choice, as lenders limit their best deals to their preferred clients."
The study also found that five per cent of homeowners plan to sell their property and rent in a bid to avoid mortgage rate increases.
