Rate rise could trigger millions to remortgage

Millions of homeowners could be pushed into remortgaging their properties if interest rates go up as expected, it was claimed this week.

Millions of homeowners could be pushed into remortgaging their properties if interest rates go up as expected, it was claimed this week.

Research has found that 14pc of households - representing about 2.6 m homeowners across the UK - felt they would be forced to refinance their loans if a rate rise led to mortgage repayment increases of up to £50 a month.

About 40pc of homeowners would be driven to remortgaging their homes if monthly repayments went up by £100, a Moneysupermarket.

com survey indicated.

The research suggested a quarter of mortgage borrowers affected by the last interest rate hike said

they were financially stretched, struggling with repayments or having to sell or remortgage to keep afloat.

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The Bank of England is expected to announce a further rate rise next week, with most commentators expecting a 0.25pc increase.

Louise Cuming, head of mortgages at Moneysupermarket.com, said: "The looming rate rise is of grave concern. We feel it could even be a 0.5pc rise, which - according to the survey results - will drive an alarming number of people into financial difficulty."

Frances Goldspink, of Norwich-based independent financial advisers Lucas Fettes and Partners, said: "Some forecast interest rates to rise to as much as 6pc by the end of the year, which has led a number of lenders to pull their fixed-rate mortgage deals. This will have the most significant effect on first-time buyers - it may even delay their decision to join the property ladder and ultimately could lead to a slowing in the property market."