| The New Year promises to be considerably more | | | | remortgage to an affordable monthly |
| expensive for an estimated 12,000 homeowners | | | | repayment. The lower rates have higher fees, |
| as the fixed-rate period of their mortgage | | | | but giving up some of your accrued equity to |
| expires and reverts to Standard Variable Rate | | | | give yourself peace of mind knowing that |
| (SVR), according to data released by online | | | | you'll be able to afford your mortgage into |
| UK mortgage company John Charcoal. | | | | the foreseeable future is surely a price |
| | | | worth paying. |
| The difference that mortgage holders need to | | | | |
| find each month will come as quite a shock to | | | | "If you are thinking of going for a discount |
| most; a typical £150,000, 25-year | | | | rate or tracker mortgage because you are |
| repayment mortgage with a fixed-rate of 4.39% | | | | gambling on interest rates falling over the |
| switching to SVR of 7.75% will see payments | | | | next couple of years, ask yourself if you |
| rise from £824 per month to at least | | | | will be able to pay an increased amount if |
| £1,132, an increase of £308 per month. | | | | interest rates go the other way, and rise." |
| That equates to needing to a rise in income | | | | adds Tucker. |
| of approximately £5,000 per year just to | | | | |
| maintain the mortgage repayments. Add in | | | | If you are one of the 12,000 mortgage holders |
| council tax rises and other costs of living | | | | looking to remortgage before Christmas you |
| and the picture looks dire for those who | | | | need to do your maths to work out which is |
| haven't switched to a new fixed rate deal. | | | | the best deal for you, not just today but |
| | | | into the near future. An independent |
| And even if those whose deals are about to | | | | financial advisor could give you an impartial |
| end can manage to find a new deal, they will | | | | view on the merits of applicable products as |
| find that today's fixed rate mortgage is at | | | | well as help you out with the maths. |
| least full 2% higher than when they first | | | | |
| took out their mortgage. Lenders have been | | | | But as UK mortgages become more expensive it |
| re-pricing their deals ever since interest | | | | is perhaps inevitable that some people will |
| rates started rising and the key to getting a | | | | get into difficulties attempting to repay |
| lower rate may be to pay a higher arrangement | | | | their mortgage. However, careful planning and |
| fee. | | | | extensive shopping around to compare |
| | | | mortgages long before the current deal |
| Katie Tucker, product specialist at Charcoal | | | | expires may give mortgage holders more chance |
| believes that policy is best. "What is | | | | of getting a reasonable new deal, and avoid |
| vital," she says, "is that borrowers | | | | the shock of the new rates. |