Personal Loan Store Logo
UK Loan Comparisons

Concerns over the end of cheap fixed rate deals

Concerns are rife across the UK in relation to the many consumers that are currently on cheap fixed rate mortgage deals that are due to come to an end in the coming months.

Many people that took out cheap fixed rate deals two or three years ago are due to see their fixed rate periods end, which means that many will have to switch to the lender's standard variable rate, which could add hundreds of pounds a month onto their mortgage repayments.

Experts are concerned that this could result in a rocketing level of repossessions in the UK, as homeowners struggle with keeping up with their repayments. In fact, the Council of Mortgage Lenders has suggested that some people should consider selling their homes rather than facing the prospect of having to move to the lender's standard variable rate, add hundreds of pounds to their repayments, and end up losing their home because they cannot keep up with these repayments.

Around 1.4 million homeowners are due to come off cheap fixed rate deals and switch to higher interest rates in the next 12 months according to the Council of Mortgage Lenders.

One official from the CML stated: 'There is a potential payment shock of anywhere between 30% and 60% for many.' Although some homeowners will be able to switch to another deal such as a discounted rate there are people that may not have any other choice but to revert to the standard variable rate.

The CML official also said: 'We are facing very difficult times. We have a number of uncertainties in the market. We've effectively had two seismic events that we've still not recovered from - the earthquake of the capital markets closing because of the problems in the US subprime market and the earthquake of the Northern Rock bank run.'

Tom Smith
29th November 2007

Recent News:

  • House prices to slowdown next year [27.11.07]
    The Nationwide Building Society has warned that house price growth could grind to a halt next year, stating that there will be a 'significant slowdown' in house price growth over 2008.
  • Tenants better off than homeowners [27.11.07]
    According to a recent survey the benefits of owning a home rather than renting have plummeted by 75% over the past twelve months, which means that in many of the country's regions tenants that are renting their home are actually better off than those that own their own home.
  • Lenders may be raising mortgage rates [24.11.07]
    A recent report has indicated that many lenders may be looking to raise their mortgage interest rates as a result of the turmoil that has been caused by the global credit crunch that has swept across the UK and other parts of the world.
  • About HIPs [22.11.07]
    Earlier on this year the government in the UK introduced HIPs, or Home Information Packs. These HIPs have to be provided by the vendor or agent for any home of three bedrooms or more that goes up for sale in England or Wales.
  • Small rise in fixed rates over two years [22.11.07]
    According to data from the Bank of England there was a marginal rise in interest rates on two year fixed rate mortgages last month.
  • Be careful about home improvements [19.11.07]
    According to some industry experts there may be in an increase in the number of people carrying out large scale home improvements over the coming months as a result of lower consumer interest in purchasing property and fewer properties coming onto the market.


Early Redemption Penalties - Loan Extras - Debt Consolidation Bad Credit - Choosing a Personal Loan - Loan Penalties - Money Saving Loan Tips - Loan Reviews
Site Map - Directory - About Us