While the prospect of an interest rate rise in the immediate future may seem unlikely, see my article Latest interest rate predictions – October 2010, the fact remains that rates will inevitably have to rise at some point.
A survey by the charity Shelter earlier this year suggests that five million home owners will be unable to afford an interest rate rise and will be in danger of being evicted from their homes. This is an alarming statistic and I want to see how close we really are to this abyss. Is it sensationalist journalism or are a lot of people clinging on to their homes because of the current 200 year low interest rates?
I fear it is the later. But to test this theory I’ve created a poll (in the right hand column). It simply asks ‘How much could your monthly mortgage payment increase by before you are unable to pay it?’ and gives you a range of options. It is completely anonymous and takes a second to vote. You can even view the ongoing results by clicking on view results.
Please take the time to vote as I will write an article on my findings in the future. Who knows, it may even help influence those in power making the decisions affecting us all.
How your finances could be affected by a 1% interest rate rise
Now while most of us know how much we can afford our monthly mortgage payment to rise by before we would be unable to afford it very few people can relate this to actual movements in the bank base rate. ‘’Around 74pc of people with a mortgage admitted they did not know how a 1 percentage point rise in the Bank of England base rate would affect their monthly outgoings, according to the Consumer Financial Education Body (CFEB)’’
So how will your finances be affected by a 1% interest rate rise? For the answer to this question please read my article Most home owners unaware of impact of interest rate rise.
Looking for a financial adviser near you?
Do you need financial advice? An independent financial adviser can show you how to make the most
of your money. Find your nearest qualified and regulated adviser using this VouchedFor search tool.
Alternatively, Hargreaves Lansdown, one of the UK’s largest firms providing restricted financial advice, is offering a £200 John Lewis voucher* to new clients.