Cost of a mortgage increases by £500 a year
News that the mortgage industry has been swift to increase rates in reaction to the events of the last two weeks has caused more heartache for home owners with confirmation that the average mortgage will now be £500 a year more expensive than last week. This figure is not too far off the forecast when Lloyds Bank took over HBOS where the figure was expected to be nearer £600 a year. So what does this mean for the future?
While an increase of just over £41 a month for the average mortgage may not sound like an awful lot of money, it comes at a time when 'free' money has never been tighter for the consumer. Even the oil price seems to have risen from the ashes again with fuel companies quick to instill marked rises to cover their increasing costs. Just when we thought the price of oil was slipping back below $100 and mortgages were on the way down, it has all turned full circle overnight.
This will place yet more pressure on the housing market, reduce the price of properties across the UK and push more and more people towards financial hardship. Unless the US bailout is successful we could see a sharp lurch downwards for the UK economy.
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