SELL YOUR HOME QUICKLYNo mortgage relief expected despite predicted rate cuts
Analysts have warned that mortgage owners are unlikely to reap any benefits from official interest rate cuts, which are expected next week.
Major banks and building societies raised their rates for first-time home buyers in recent days, surprising mortgage professionals who expected them to wait until the Bank of England adjust interest rates on April 10. Another rate cut is expected, but experts believe that building societies and banks are unlikely to pass the rate cut on to their mortgage customers.
This blow follows news that an increasing number of mortgage companies are withdrawing offers for first-time home buyers.
Three quarters of homeowners facing mortgage shock
Meanwhile, it has been reported that the number of UK home buyers has fallen by 40 percent. This comes as no surprise following reports that nearly three quarters of homeowners are facing a mortgage payment shock as their fixed rate deals expire.
According to research by financial website Fool.co.uk, borrowers coming off a fixed rate will on average be paying 1.5% more when taking out a new bond. This percentage could rise even more for homeowners who originally fixed their rate at between 4% and 4.5%.
According to the Fool.co.uk research, one in four of the homeowners polled could only secure repayments calculated at between 7% and 7.5%.
To put things in perspective, an average 25-year repayment mortgage of £200,000 fixed at 4.8% will cost the homeowner £1,146 per month. However, every 1% rate increase will add £120 to the repayment.
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