Homeowners 'may find mortgage increases a shock'

Date:Wednesday 20th May 2009
Author: Susanna Kavka

Homeowners who took out mortgages in early 2007 may find that their monthly repayments rise significantly when their current deal comes to an end.

This is the suggestion of Peter Cowell, a broker at Click n go Mortgages, who said that consumers would find the rise in costs to be a shock.

Recently, they have got used to interest rates falling and have been paying less for their home loans, he added.

Mr Cox also pointed out that property values have declined and the loan-to-value ratios that lenders will accept have fallen too.

He added: "Very few people have probably been wise enough to keep the payments at the same level and make overpayments."

Meanwhile, Cath Hearnden, a director at MyMortgageDirect, recently suggested that the falls in house prices seen recently in the UK will mean that some homeowners will be unable to qualify for attractive mortgage rates when it comes to renewing their home loans.