Families urged to guard against future interest rate rises

Families urged to guard against future interest rate rises

Finance platform, Freedom Finance, is urging UK families to review their finances after revealing a future interest rate rise could add more than £750 to the average annual mortgage bill.

While the Bank of England agreed yesterday to keep the base rate at an all-time low of 0.25%, analysts widely predict higher interest rates are likely sooner rather than later.

Freedom Finance reviewed its consumer database to provide a snapshot of the nation’s mortgage finance from July, which showed the average family has a £130,000 mortgage on a 19-year term. A one per cent rise on a lending rate of 2% would equate to an extra £756 a year.

In response, Freedom Finance has launched its #LowRateLockIn campaign to help customers understand the impact of a rate rise on their mortgage repayments via its dedicated online calculator.

Andrew Fisher, MD of Freedom Finance, says consumers should do their sums now and understand the impact even a small increase in interest rates could have on their monthly mortgage payments.


Andrew said: “Once families are armed with the right information they are in a much stronger position to take action to ensure they’re on the best rate for their circumstances and aren’t spending money unnecessarily.

It’s easy to feel helpless when encouraging financial news has been so thin on the ground for such a long time. As a country we’ve become use to financial restraint – everyone from the Chancellor of the Exchequer to the average homeowner has been forced to tighten purse strings. Anything which adds costs to the family budget will have an impact, and for many people even a modest increase can significantly erode disposal income.

While it’s unlikely that we’d see an increase of one per cent in one month, it’s perfectly conceivable that in the space of only a few months many people in the UK will have to factor in a substantial extra cost.

For some that will mean the annual summer holiday has to wait for another year, for others it might mean having to reduce how much they save; some people are having to balance such a tight budget that the impact could be greater still.”

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Latest Comments

Tony Gimple
Tony Gimple 09 Dec 2017

Linking professionalism to limited company borrowing is a flawed concept. Despite S24 etc., limited companies are the most tax inefficient way of running a property business and leave borrowers seriously...

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Evelyn Attwood
Evelyn Attwood 01 Dec 2017

It's normal. If you plan to buy a house in one of the most beautiful spots in the country you should pay a high price.

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Evelyn Attwood
Evelyn Attwood 01 Dec 2017

I think that the situation will be the same at December.

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Scott Garnet
Scott Garnet 06 Nov 2017

If you have a patio or a porch it is important to make sure that any connecting doors are secured. Good advice for sliding glass doors is replacing the panels with storm resistant glass and getting heavier...

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richardrawlings
richardrawlings 01 Nov 2017

What has not been mentioned here is the effect of not only higher interest payments, but also that these payments are less likely to be offsettable as a business cost due to the scaling back of mortgage...

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Kelvin Lloyd
Kelvin Lloyd 09 Oct 2017

IT is up, to the Planners. If they will only give permission for bungalows on certain (suitable) sites, they will be built.

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maggie swift
maggie swift 09 Oct 2017

It's just the beginning of the shocking rise.

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maggie swift
maggie swift 09 Oct 2017

I have recently read that the bungalows can provide social housing for elderly residents in London.

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zoe glover
zoe glover 05 Oct 2017

Update! Worst company I have ever dealt with. Undervalued a Cambridge property by over 100k, wont take on any evidence of valuation including a RICS valuation done 3 years ago for the very same value...

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Paul Edwards
Paul Edwards 27 Sep 2017

Its nonsense articles such as this that make it harder to get clients to realise just how difficult the market is out there. When you see Rightmove and there are more 'price reduced' then 'new' most days...

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Tom Allen
Tom Allen 20 Sep 2017

Absolutely agree with you!

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RyanGeo
RyanGeo 18 Sep 2017

A sharp correction would be a less dramatic expression to use. That is already underway in certain sectors in Reading where I practice as Chartered Surveyor

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