Money Saving Expert, Martin Lewis warns of a possible "ticking timebomb" with mortgages if the UK interest rate rises follows the market predictions and rises to 6%. He explained on ITV's Good Morning Britain that those with variable rate mortgages or fixed-rate deals coming to an end should go on a comparison website to see what is currently available.
He said: “Check your existing company to see what it will give you and then mortgage brokers are worth their weight in gold right now.” Mr Lewis explained that for some people there may be a good reason for them to break their fixed deal, but added that it was "not right for everyone" and advised viewers to let a mortgage broker calculate the numbers.
The Bank of England could need to raise interest rates as high as 6% according to recent suggestions. However, Mr Lewis explained that this would be “catastrophic for mortgage holders."
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Mr Lewis highlighted the costs that it could add to mortgages, and explained the difficulty the rise in interest rates could have on individuals trying to pass an affordability check. He said: "Many people will start failing affordability checks at that rate.
"So they’ll either be stuck on only their own company’s deals or going to a standard variable rate." With the current living costs and expected increase in interest rates, it could be a difficult time ahead for mortgage holders.
Our mortgage calculator could help to determine how much difference you will pay based on different interest rates.
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