NEWS: Three million home owners could 'struggle to pay mortgage'
Monday 20 December 2010
Three million home owners could 'struggle to pay mortgage' (The Telegraph)
The CBI has warned that three million home owners could struggle to pay their mortgage if interest rates rise in line with predictions.
If there is higher-than-expected inflation in Spring 2011 and continually over the next two years, there could be severe consequences for the seven million home owners who have variable-rate home loans. This, according to the Council of Mortgage Lenders, includes about 2.9m home owners who would have mortgages that are no longer deemed "affordable" according to guidelines set down by the City watchdog, the Financial Services Authority.
An interest rate rise of 2 percentage points would push up the cost of a £150,000 interest-only mortgage by £250 a month.