Mortgage holders protected from rates rise
Oct 02, 2006
The majority of borrowers will still be able to afford their mortgages despite last month's rise in interest rates, it has been claimed.
With more than half of building society outstanding loans at fixed interest rates, the majority of people should be able to manage their debt commitments, director general of the Building Societies Association (BSA), Adrian Coles, has said.
Those with a fixed rate mortgage will be protected from the Bank of England's base rate rise to 4.75 per cent as their interest rate will not change for a fixed period of time, unlike those with a tracker mortgage, whose rate follows the base rate.
Borrowers should still ensure that additional rises in interest rates will not make mortgage repayments unaffordable, they added."There are indications that the mortgage market is due to come off the boil to a gentle simmer. The decision by the Bank of England to raise interest rates is bound to bite over the next couple of months"
July was hailed by the BSA as a strong month for the mortgage market, with net mortgage approvals showing the highest July figures on record.
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