|
Mortgages - Keeping up your repayments
You can afford your mortgage now, but what if...
Taking out a mortgage is one of the biggest financial commitments you can make, both in terms of the amount you borrow, and the length of time it may take to repay it. You may be able to afford your mortgage today but what would happen if..?
Your income falls?
Your income could fall if:
• you lost your job, or had to take a drop in income;
• you or your partner stopped work to have a child or to look after a dependant; or
• you became ill and couldn't work.
Interest rates rise?
• Your mortgage payments to your lender could go up (or down) if interest rates change. Mortgage interest rates are related to the interest rate set by the Bank of England and lenders usually apply some or all of any change to your mortgage.
• Unless your mortgage rate is fixed for the full term of your mortgage, this will affect you.
• Often, special rates are for a set period so when they come to an end your payment will change - it could be much higher.
Although interest rates have been stable over the past few years, this could change. In the past, interest rates have risen from 7.5% to 15% in just a few years. Interest rate rises could increase your monthly payments considerably, making it difficult for you to afford them.
Back to mortgages homepage
|
