32% of mortgage borrowers believe they will find it difficult to meet monthly repayments if interest rates increase by two percent, according to pollsters ICM research.
The research asked borrowers much they agreed that a two-point rise in interest rates would cause them to ‘struggle’ to pay their mortgage, with 18% agreeing and a further 14% strongly agreeing.
Rates at all-time lows
The news comes despite the fact that interest rates are currently at their lowest ever levels.
This is partially thanks to the Bank of England (BoE) keeping the base rate of interest at a historic low of 0.5% since 2009. On Thursday they voted to keep it at that rate for now.
Rate rises from the BoE have been consistently pushed back this year and remain unlikely before the 2015 election next spring, but Governor Mark Carney has stated several times that rate rises will occur next year.
Fix a rate now?
Mortgages of all types have fallen in price in the final quarter of 2014 to headline grabbing 0.99% rates from HSBC.
Mortgages with variable rates are currently the cheapest, but will become more expensive when the Bank of England eventually does raise the base rate.
If you’re worried about not being able to meet your monthly repayments, fixing at a rate for two to five years, will guarantee your costs.
Whilst fixed rates are slightly more expensive now, could be cheaper in long run should rates rise.
Find an affordable mortgage rate
First time buyers – Find the best fixed rate for your budget.
Remortgaging – Get a better rate fixed a longer term.