Mortgage borrowers urged to switch to fixed rate as confusion grows

By Michelle Rock

Mortgage borrowers in Northern Ireland and the rest of the UK are being encouraged to switch to a fixed rate deal before the base rate of interest is increased, with a report showing widespread confusion among homeowners about how a rise would affect them.

A survey produced by Barclays Mortgages and Centre for Economics and Business Research revealed that over half of mortgage borrowers said they were confused about when interest rates are likely to increase, with 46 per cent unable to say what the current base rate is. Of the people who responded to the survey that were on a variable rate mortgage deal, a half thought their monthly mortgage payments would not change in 2015.

It is estimated that 1million property owners in Northern Ireland and the rest of the UK purchased their house when the base interest rate was at it's current record low of 0.5 per cent. They have never experienced an interest rate rise which is why so many are unaware of just how much their monthly mortgage payment could increase. A potential interest rate increase was muted for the end of 2014, and then was quickly pushed into 2015. Commentators are largely expecting the rise to come by the second or third quarter of this year, but they have been wrong before. Mortgage advisors throughout the UK are advising clients that the days of certainty around the rate freeze are over, and encouraging borrowers to consider a remortgage to switch to a fixed deal.

If you are buying, selling or remortgaging a property in Northern Ireland, and want to speak to a conveyancing solicitor, contact Wilson Nesbitt in Belfast by calling 0800 840 9290.

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