Homeowners ‘worried about interest rates’

People with mortgages are beginning to get anxious about the possibility of future interest rate changes, one expert has suggested.

Spokesperson for comparison site Moneyfacts Michelle Slade said this concern had resulted in a number of people seeking fixed-rate mortgages.

She said: “The best way to protect against any future rises is to opt for fixed deals. While fixed-rate mortgages are currently higher than tracker deals, customers can budget [more] easily”

Increased risk margins for lenders are affecting the interest rates with consumers on tracker mortgages being hit particularly hard, she added.

Ms Slade also warned that some people may be hit with interest levels of more than seven per cent if rates rose to heights of last year.

According to a recent Halifax report, the cost of running a house accounted for nearly a quarter (23 per cent) of the typical UK full-time wage this year.

Electricity and gas costs were found to have gone up by £159 between April 2008 and April 2009.

By Francis Finch