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Half of those effected unaware of rate rise


Half of homeowners who will be directly affected by a rise in interest rates are not aware that their mortgage payments may increase in the near future.
According to a report from Barclays and the Centre for Economics and Business Research (CEBR), 50% of homeowners with variable rate mortgages are not aware that they are set to pay higher monthly repayments if there is a rise in interest rates in the near future.

Only a third of people affected are putting any money aside for the interest rate rise increase, despite the fact that the CEBR predict a minimum total mortgage payment rise of £723.8 million across the UK in May.

This is worrying news as even a rate rise of 0.25% in May would see homeowners across the UK paying an additional £101.33 on average. The CEBR predicts an average annual £81.12 increase, at the very minimum, in mortgage payments for individuals by the end of 2015.

The report also showed that half of people are not able to recall what the current Bank of England base rate is, 61% are unsure about when the base rate might rise, and 88% are unaware of the BoE’s recent interest rate forecast.

This lack of awareness may contribute to UK mortgage holders experiencing financial difficulties in 2015, as CEBR predict that homeowners across the UK could face a potential £1.1 billion total increase in mortgage repayments by the end of 2015.

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