Three-quarters of homebuyers fear interest rate hike that could 'push them over the e

geneer

75% of homebuyers eh.
Thats a rather significant number.

Does seem to make a mockery of the old "no on overstretched themselves its all supply and demand" argument advocated by the tin-foil hatters.

Three quarters of home buyers are concerned about mortgage rates, fearing it would take only a small hike to send them over the edge, a new report shows.

The research by consumer watchdog Which? shows one in seven cash-strapped buyers are already struggling to make their repayments.
But despite their problems only a third of people affected are approaching their lenders for help.

Options available to those with difficulties include moving from a repayment to interest-only mortgage, taking a payment holiday or allowing them to switch to a different deal.



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Which? surveyed more than 4,000 home buyers for the report and are now calling on lenders not to use the current financial crisis as an excuse to neglect struggling borrowers.

Although they found most lenders do offer some form of assistance to those finding it difficult to make their repayments, Which? believes a significant minority still aren't doing enough to help their customers.


A one per cent increase to the Bank of England base rate would add over £50 to the monthly repayments of someone with a £100,000, 20-year mortgage and this would have a serious impact on three quarters of households.

Thirty seven per cent of those quizzed said they would need to cut back on regular spending.
20 per cent said they would reduce the amount they are saving and nine per cent said they would not have enough for basic essentials.

Although the base rate is not expected to rise in the near future, figures show that a fifth of lenders have increased the rates on their SVR mortgages since it reached an all-time low of 0.5per cent in March 2009.

Inflation vs interest rates: Base rate has dived below inflation


Which? executive director Richard Lloyd said: 'With ongoing uncertainty about the economy, it's not surprising that many people are worried about their household finances.

'For some it would only take a small increase in mortgage rates to send them over the edge. 'If you're struggling with mortgage repayments then your first port of call should be your lender.

'It's not in anyone's interest for people to default on their mortgage, so it's important that lenders do all they can to help their customers who are struggling with repayments.'



Read more: http://www.dailymail.co.uk/news/article-2024429/Three-quarters-homebuyers-fear-rate-hike-push-edge.html#ixzz1UeYsRbDh

HAMISH_MCTAVISH

geneer wrote: »

75% of homebuyers eh.
Thats a rather significant number.

It sure is.

Until you dig into the details and look past the hyperbolic headlines.

Where just.......

nine per cent said they would not have enough for basic essentials.

..... and the rest just might save less or spend less on other things.

What's that? Context and analysis? Love it....:rotfl:

Graham_Devon

HAMISH_MCTAVISH wrote: »

What's that? Context and analysis? Love it....:rotfl:

That 9% is based on a 1% rise, something you have chosen to ignore in your context and analysis.

Whole threads seem to be based on this game between posters as to what they can do with an article or a set of statistics based on what they have chosen to ignore.

geneer

Graham_Devon wrote: »

That 9% is based on a 1% rise, something you have chosen to ignore in your context and analysis.

Whole threads seem to be based on this game between posters as to what they can do with an article or a set of statistics based on what they have chosen to ignore.

Some posters more than others.

HAMISH_MCTAVISH wrote: »

Context and analysis? Love it....

Bless. If you did engage in a bit of logical context and analysis, you really wouldn't be as much fun Hamish.
For example you wouldn't have been forced into ghosting out of our Edinburgh discussion.
On topic....Silly sausage. Still confusing the ability to service a debt, at a push, with everything being hunky dorey.
It seems 75% of those surveyed disagree with you.

Procrastinator333

As they are not going up any time soon. What does it matter?

wotsthat

A one per cent increase to the Bank of England base rate would add over £50 to the monthly repayments of someone with a £100,000, 20-year mortgage and this would have a serious impact on three quarters of households.

So what? It's not going to happen.

Although the base rate is not expected to rise in the near future, figures show that a fifth of lenders have increased the rates on their SVR mortgages since it reached an all-time low of 0.5per cent in March 2009.

So four fifths of lenders haven't increased SVR rates? Some decent fixed rates at the moment.

Anyone seen my tin foil hat?

Pimperne1

A one percent increase in the BoE base rate would have a serious impact on three quarters of households? Don't need to conduct a survey to know that that is completely and utterly preposterous. Normally respect Which but this time I think they have their own agenda.

heathcote123

Do they mean recent homebuyers, or homebuyers in general I wonder?

Surely it's normal for recent homebuyers to be stretched?

Regardless, great news for our sensible, deposit-laden bears; with this many on the edge & public ownership of the banks, govt will make sure mortgage rates are going nowhere for a long time.

Couple this with a touch of inflation on the horizon, it's a fantastic time to buy. Maybe never been better.

ButterflyBee

My mortgage lender(owned by the goverment) will not put me on a fixed 4.8% rate but will keep me on the daily variable.When rates increase I will be totally stuffed and the chances then of paying off the debt is practically null and void.

Perhaps I should give up my second job which will give me more time to cause a riot because the goverment has not helped us other ??% home owners who do not claim benefits but work, work, work to pay the bills!

wotsthat

ButterflyBee wrote: »

My mortgage lender(owned by the goverment) will not put me on a fixed 4.8% rate but will keep me on the daily variable.When rates increase I will be totally stuffed and the chances then of paying off the debt is practically null and void.

If you want to pay off your debt wouldn't a repayment mortgage rather than interest only be a better option?

ButterflyBee

A repayment will be the best option on a fixed rate, but, they are not re-signing new or existing mortgages. They are however, happy to take overpayments which I am currently doing by increased direct debit every month. If the rates start to increase then overpayment will covering the increased interest.