Interest rate decision could spark remortgaging frenzy

Interest rate decision could spark remortgaging frenzy

An anticipated interest rate rise next week could force millions of UK homeowners to remortgage, according to new figures.

The Bank of England's monetary policy committee is due to decide whether or not to raise interest rates on May 10th, with most economic experts forecasting a 0.25 per cent rise this month.

If that is to be the case, Moneysupermarket.com estimates that seven million people will need to remortgage in order to be able to keep up with payments.

As a result, Louise Cuming, head of mortgages at the website, is urging homeowners to look at their mortgage payments and take action if affordability is going to be an issue, something only one in eight mortgage holders have considered doing.

"The looming rate rise is of grave concern," she said. "We feel it could even be a half per cent rise which, according to the survey results, will drive an alarming number of people into financial difficulty."

Even a 0.25 per cent rise in interest rates would bump up the yearly cost of a £150,000 mortgage by £271.32 a year. If the mortgage was interest-only this figure would rise to £375.

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