MortgagesAug 21 2014

Halifax reveals impact of base rate rise

twitter-iconfacebook-iconlinkedin-iconmail-iconprint-icon
Search supported by

Research by Ipsos Mori on behalf of Halifax found that while two in five mortgage holders say they are concerned about rate rises, there are wide regional variations.

With a consensus that the first Bank of England base rate increase since July 2007 is drawing ever closer, the survey found homeowners in the north east (61 per cent) are not worried about the change.

Six out of 10 homeowners in Wales and Scotland (58 per cent) are the least concerned.

Homeowners in the south east (53 per cent) are the most concerned, followed by the south west (49 per cent) respectively.

Nationally, one in 10 mortgage holders (13 per cent) said they were worried they would find it difficult to afford their monthly mortgage repayments if the amount was up to £50 higher.

A third (33 per cent) said they would struggle if the amount was up to £100 higher, and this figure increases to 42 per cent for those on variable rate mortgages.

Craig McKinlay, mortgages director of Halifax, said: “Speculation of a potential rate rise has been high up on the news agenda for some time now, so it is perhaps surprising that the majority of homeowners are not concerned about this.

“However, with base rate historically low, and the Bank of England reinforcing its position that there will not be a rush of successive rate rises, it is understandable as to why the perceived impact of future rises is being dampened and homeowner sentiment is reflecting this.

“With the base rate remaining at 0.5 per cent for over five years, a significant number of homeowners have not yet experienced the effects of a rate rise.

“While responsible mortgage lenders take in account potential rate increases as part of the affordability checks in the mortgage application process, the way in which people manage their remaining disposable income will be a key factor in how well they can adjust to any changes in rates.”