Citizens Advice: Rate rise could spell disaster

Many mortgage borrowers are already stretched to their financial limits and the added pressure of heightened repayment rates in the wake of the increase could leave some homeowners at risk of repossession, the charity maintains.

“A rise in mortgage interest rates could spell disaster for people whose finances are balanced on the very edge of affordability,” said Peter Tutton from Citizens Advice.

“Lenders need to be sympathetic towards people who are struggling with payments and we would advise people taking on a new mortgage to check whether they can afford the amount they wish to borrow,” he added.

The most recent rise in the base rate of interest was the fifth quarter-point increase introduced by the Bank of England since August of last year.

During 2006, more than 1.4 million consumers approached Citizens Advice about debt concerns, according to the organisation’s own figures.