Rate rise alert

10 March 2011

One in four homeowners may be completely unprepared for the costs of rising interest rates, Shelter has warned.

Today the Monetary Policy Committee meets to decide whether record low interest rates should go up.

In a survey of more than 1,500 UK homeowners by the Council of Mortgage Lenders, one in four people believe current interest rates are either higher, the same than they have been in the past or simply don’t know.

This is particularly concerning given recent Shelter research showing that in the past year:

Campbell Robb, Shelter’s Chief Executive said:

‘It is frightening to think so many homeowners are completely unaware that interest rates are at a record low. We are extremely concerned that millions will be financially unprepared when interest rates go up and won’t have plans in place to manage increased costs.

‘It’s not just mortgage costs that will be affected. Charges on other debts will rise at the same time, meaning people will have to pay more on other money they owe.

Mr Robb added: 'Even for those who have been managing to stay afloat so far, we know only too well that just a small increase in some people’s monthly outgoings will be the trigger that finally pushes them over the edge into a spiral of debt, repossession and possible homelessness.’

Will you be affected by rising interest rates?

Be prepared for a rates rise by getting advice early. You can use our mortgage calculator to help you: