With warnings echoing that more than two million households are in danger of becoming mortgage prisoners when interest rates rise, what can you to avoid a financial disaster?
The simple rule is to prepare now for future rises. If you can find an affordable fixed rate deal, that will give you the certainty of knowing how much monthly repayments will be for up to 10 years ahead. On top of that, if rates start to rise rapidly, you’d end up saving a fortune in interest charges.
If you’re already on a good deal, you could start to prepare for future rate rises – and increased repayment demands – by making monthly overpayments on your mortgage now, if your deal allows you to. Then, when rates do go up you won’t experience rate shock. On top of that the overpayments will have cut the amount you owe on your mortgage which means you’ll save future interest charges and potentially be able to remortgage at a better rate because you have more equity in your home.
We asked mortgage experts what you should be doing now if you’re worried about potential future rises for a variety of different situations.
What to do if: