Homeowners around the UK have been warned to prepare themselves for a financial shock if their fixed-rate mortgage deal is set to expire over the course of the next few months.
Nationwide suggests that around a quarter of a million fixed-rate mortgage deals are approaching maturity and borrowers could face debt management difficulties if they are not adequately prepared for the resulting changes.
Indeed, the building society reports that homeowners whose mortgage deal runs out between next month and the end of they year could be obliged to pay around £200 more per month than has been the case in recent years.
“For some borrowers it will come as a quite a fright to see their mortgage payments increase dramatically.,” said Matthew Carter, Nationwide’s director of mortgages.
“To absorb some of this shock, borrowers need to consider remortgaging as soon as their deal ends, or beforehand if their lender allows it.”
Many homeowners have debt management problems worsen this year in the wake of five increases in the cost of borrowing since August 2006.