8
Sep
Homeowners with variable rate loans 'could see big rise'
Homebuyers looking for a house for sale in the UK have been advised
against taking out a tracker mortgage after one expert suggested
there could be a big rise in interest rates.
According to Riach Independent Financial Advisers Bob Riach, there
could be a steep increase in repayments "within a year or
two".
His comments come just a day before the Monetary Policy Committee
announce its decision whether to hike up the Bank of England base
rate from 0.5 per cent.
Mr Riach recognised that this is the lowest bank rate yet and
repayments for homeowners with variable rate loans have been
reduced significantly, "things will not stay this way
forever".
He predicted that rates could start going up again "before the end
of the year" - estimating that the base rate will rise to one per
cent before the start of 2011.
Principality Building Society recently launched its new mortgage
product which allows homeowners to switch between a tracker and
fixed-rate mortgage, enabling them to avoid the dilemma of rising
interest rates. 