Borrowers being told to face higher repayments in the future

08/06/2007

The Council of Mortgage Lenders have stated that the Bank of England MPC choice to freeze rates.

From CML’s recent survey, estimates show nearly 1.3 million borrowers took out a fixed-rate mortgage during 2005, further more 1.5 million during 2006.

Most borrowers will suffer high interest rates from 0.75 per cent to 1.5 per cent. CML feel that borrowers will be uncapable of managing higher payments.

CML Director Michael Coogan, commented: "While today's decision not to raise rates is welcome, there is no cause for complacency. More than two million borrowers over the next year and a half will reach the end of fixed-rate deals, and will face the prospect of higher mortgage payments.

"For most people, the scale of the increase will be manageable. But it makes sense for borrowers whose fixed-rates will end soon to start planning ahead now, and to recognise that their monthly costs will be higher in the future. Anyone who thinks they may face financial difficulties should talk to their lender at an early stage to see what steps can be taken to improve their situation." he added.

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