A fifth of mortgage holders in the UK would be unable to repay their mortgages, so says The Money Advice Service, if and when the expected interest rate rise occurs.
The public advice body released the results of a survey inquiring into how people would cope if they had to start paying back slightly more on their mortgage each month.
Interest rates have hit a low recently, dropping, in some cases, below 3%. This is strongly expected to rise again by experts in the New Year however.
19% of those surveyed reported that they would have difficulty in meeting payments, should the interest rates on their mortgages rise.
The proportion of those who feel they would struggle jumps up to 47% however when asked if they would be able to cope with a £150 a month increase.
To drive home the point about how much people will struggle, a £150 increase in monthly fees is roughly a rise of 2 percent on the interest rate of a £150,000 mortgage with a 20 year term.
Nick Hill, of the Money Advice Service, said: “Mortgage holders need to be more mindful of the fact that a rise in interest rates is widely predicted – even for those on a fixed rate, as their deal will come to an end sooner or later.”
The survey included 3,007 mortgage holders with both variable rate mortgages and fixed rate mortgages .
