Friday, June 1, 2007

Tick, tock, tick, tock….

Timebomb for 1m mortgages

Up to a million homeowners could see their mortgage repayments jump by almost a third in the next 12 months as they approach the end of cut-price mortgage deals.Four interest rate hikes in the past 10 months mean that borrowers are now facing a ticking timebomb as they near the end of two- and three-year fixed-rate mortgages taken out in 2005, which are now poised to shift on to more expensive rates.The problem is also backloaded to the end of this year because there were a number of good deals around in the latter half of 2005 after the rate cut in August of that year.About £200bn of mortgages – approximately 20 per cent of the UK mortgage market – moved onto fixed-rate deals in 2005, according to new research by analysts at Credit Suisse

Posted by soothsayer @ 09:34 PM (505 views)
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2 thoughts on “Tick, tock, tick, tock….

  • Does anybody know how much extra they’ll be paying if we get another 2 rate rises by summer’s end or autumn?! 🙂

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  • I don’t understand fixed rates. You take out a loan over 25 yrs, and, somehow a 2yr fix is defined as fixed. If people keep re-fixing loans every 2yrs, with some people paying 2.5% of the loan to fix, they are being fleeced. Potentially, that’s about 10x of paying 2.5% of the whole loan, what a RIP off. Most fixed rates only break even if rates rise a whole 1 or 2 % because of all the fees. What could happen is, that people in distress will give up their final bit of liquidity to try to get some stability, but get kicked over by the smallest domestic charge, car crash, broken boiler, etc. But with credit card rates goin up, there’s no buffer.

    I don’t care about the BTL’s but there are many families out there, gonna b screwed. How many will have been budgeting for 1/3 or more raise in repayments when they will have over stretched themselves in the first place. Gonna b nasty, blood on the streets!

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