Today, the Bank of England’s Monetary Policy Committee will meet for the first time this year to decide if the base rate should increase, but research from TSB shows that many British homeowners are unprepared for a rate rise in 2016.
Its report shows that nearly three quarters (72%) of homeowners are likely to see their mortgage payments increase if the base rate rises, with one in five (20%) having “no idea” how even a small change could have an impact on their monthly mortgage repayments. More than half of the home-owning population (56%) say they are already struggling with household bills.
Reacting to a base rate increase, 43% would try to switch to a cheaper loan or mortgage, 33% would prioritise debt repayments and pay the most important ones first, while 14% would seek help from debt advice organisations.
Ian Ramsden, Director of Mortgages at TSB, said:
“The statistics included in TSB’s report are fairly shocking and clearly there’s a lot of work to be done to help Britain’s homeowners understand how they can accommodate a rate rise. But there is no need to panic; a little bit of planning now can make a big difference in the future.
“We don’t know when the Bank of England will change the base rate, but we do know preparing early and helping homeowners understand their options is the first step in helping Britain get #ReadyForRateRise.”
Published by Financial Reporter
Author Rozi Jones