Do you really
understand what the cost of purchasing your dream property is?
An increase in interest rates has been a hot topic over the
last few weeks in the finance world. With house prices rising month on month
some experts feel the housing market is beginning to overheat. One way in which
the Bank of England can look to counteract this issue is by increasing interest
rates but how much will this really affect homeowners?
One research study by Experian (Telegraph)
shows that buyers are already underestimating their potential mortgage
repayment by £500 a month. This could rise to nearer £650 if interest rates do
in fact increase. Given that the Telegraph estimates that an interest rate
increase could affect two out of three mortgage borrowers, this could have a
significant impact on people’s lives.
What we recommend
There is a lot of uncertainty at the moment about how much
people can really afford due to recent rules introduced by the FCA and also
what impact an increase will have. We recommend that people take caution when calculating
your budget for a new house and consult an experienced mortgage professional to
gain accurate figures on how much you can afford, but also to ensure that your monthly budget is not hurt too
much by your mortgage payment!
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