Interest rate rise adds burden to mortgage payments

10-Nov-2006

First time buyers are possibly feeling more frustrated after the Bank of England's decision to increase the cost of borrowing.

Yesterday's interest rate increase to five per cent will increase the cost of borrowing for first time buyers and existing mortgage holders with standard variable rate mortgages, by around £36 per household per month.

Collectively, the nations homeowners will be contributing an estimated additional estimated £292 million.

"Any increase in mortgage interest rates could spell disaster for people whose finances are balanced on the very edge of affordability," a representative from Citizens Advice, told the Guardian.

"We would urge anybody taking on a new mortgage to check very carefully whether they will be able to afford it if interest rates rise further," they added.

With current fixed-rate and variable rate incentives currently setting interest rates at 5.48 per cent and 5.16 per cent respectively, first time buyers may benefit from professional advice to identify which mortgage is right for them.

First time buyers concerned about how an increase in interest rates might effect how much they would have to pay each month should consult a good broker.

To find out which is the best first time buyer mortgage for your situation, contact a good mortgage broker.

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