Roland McCormack, the lender’s mortgage distribution director, explained that since March 2009, it is estimated that there have been over two million new homeowners in Britain.
“Apart from being the proud owner of a property; what these people have in common is that they have never experienced a Bank of England base rate rise before.”
One of the most common questions TSB mortgage advisers get asked is around what will happen when interest rates inevitably increase, he added.
The bank’s own research found that one in five British homeowners have ‘no idea’ how a base rate rise could affect them, whilst it is estimated to affect nearly three quarters of homeowners.
“That’s worrying news for more than half of the home-owning population (56 per cent) who say they are already struggling with household bills,” explained Mr McCormack.
“As a lender, we have a responsibility and a desire to make sure consumers understand their options and are not put under any unnecessary pressure if the base rate increases. But that responsibility extends to everybody involved in the house-buying process, including brokers.”
He went on to say that while brokers are trained and regulated to ensure their clients understand their mortgage - whether it’s fixed, tracker, standard variable rate or other - “how can we be sure customers really do know how a base rate rise might affect them?”
Mr McCormack conceded that brokers cannot give clients exact advice or guidance on if, or when, the base rate will increase, but they can offer some practical steps to help homeowners get ready for a rate rise.
“If a homeowner has a fixed rate mortgage, locked in for two, three, five years or longer; remind them that their fixed rate term does have an end date and to start preparing for that end date early enough so any increase in their monthly mortgage bills doesn’t come as a surprise,” he suggested.
“Similarly, it is a good idea to remind homeowners to keep other household debt under control,” stated Mr McCormack, adding that any increase in the base rate may affect customer’s finances beyond just their mortgage, including interest rates on overdrafts and credit cards.
Just last week, the Federal Reserve chair Jan Yellen took the decision to raise US interest rates by 0.25 percentage points - the first such increase in almost a decade.
Meanwhile, the Bank of England’s November inflation report trimmed growth and inflation forecasts, with governor Mark Mr Carney stating that households should prepare for rates to rise “next year”, although sterling fell in the belief that a hike had been pushed back.