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27% of homeowners worry over interest rate rise

One in four mortgage holders fear they will be in financial trouble when interest rates start to rise, research has found.

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Homeowners 'must prepare for interest rate rise'

Credit: PA Wire

Homeowners must prepare now for an inevitable interest rate rise, the Money Advice Trust has warned.

One in 14 (7%) people said that they would be in serious financial trouble if mortgage rates and repayments changed as they expect over the next three years, while a further one in five (20%) said this would cause them slight financial problems.

Around 39% of those surveyed said they will be forced to cut spending on holidays and eating out to cope with rate rises, while one-fifth plan to reduce spending on essentials such as clothing and food.

Joanna Elson, chief executive of the Money Advice Trust, said: "After all these years, mortgage-payers are in for a big financial shock when interest rates begin to rise. For many, that shock will be too much to absorb - and there is a real risk that we will see a surge in unmanageable debt problems as a result.

"Our message to borrowers is clear - interest rates will rise and that day is coming soon, so now is the time to prepare. Draw up a budget, speak to your lender, and if you do find yourself struggling to repay, seek free debt advice as early as possible."

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