Millions of homeowners could struggle to pay off their mortgages if the base rate increases to three per cent by 2018, according to a new report.
The Resolution Foundation has found that despite the Bank of England pegging the rate at the historically low level of 0.5 per cent for over five years, many householders still haven`t made significant inroads with paying back the cost of their property, with oneinfive reporting difficulties.
This number is well up on the one in ten who struggled in 2005 and only just shy of the one in four who found paying off their mortgage difficult in the recession at the start of the 90s. However, the think tank`s Hangover Cure reports that things are poised to get much worse.
It suggests that the amount of people whose repayments take up more than a third of their after tax salary could more than double to 2.3 million by 2018, if the base rate goes up to three per cent. Even more worryingly, those who spend more than half of their income could increase from 600,000 to 1.1 million.
The Resolution Foundation wants more lenders to offer advice to prepare borrowers for the possible increases, but you could take matters into your own hands by looking for a mortgage which won`t leave your finances in such a precarious position in a few years.
At First Choice Finance, we`ll scour the our products to find the most suitable deal for you and offer it to you on a no obligation basis. If you`re happy, we can start process it straight away but if not, you`re totally free to just walk away.
Find out more at firstchoicefinance.co.uk or call and speak to an adviser on 0800 298 3000 or 0333 003 1505 if on a mobile.
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