Borrowers 'should act to avoid rate shock'

15-May-2007

Mortgage holders – which may include recent first time home buyers – should act to prevent exposure to an interest rate shock, it has been claimed.

According to London & Country (L&C), although those with fixed-rate mortgages may have been protected from the recent interest rate rises, they too should act and plan in advance to avoid payments at the Standard Variable Rate, which may interest would-be first time home buyers concerned about recent interest rate rises.

"The payment shock for many borrowers will be substantial when their deals … come to an end and it's important that they do all they can to minimise it," said James Cotton, a mortgage specialist at L&C.

"See [what] your lender is willing to offer and shop around," he added.

In related news, according to data released by the Department for Communities and Local Government, between February and March 2007, house prices increased by 1.1 per cent.

To find out about the different ways of financing a first home, see our section ‘Affording Your First Home’.

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