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News Release

London

How an interest rate rise will impact your mortgage

JLL looks at the impact nationally


In response to notions in the press that a possible interest rate rise can be expected in coming months, Nick Whitten, Residential Research Associate Director at JLL comments:
 
"For the best part of a decade homeowners have not had to face increased monthly mortgage payments triggered by a rise in the Bank of England base rate. However, Bank of England Governor Mark Carney has warned of a rise in interest rates from the record-low 0.5%, potentially by the end of 2015.

"Rates are likely to rise slowly at around 0.5% per annum peaking at around half the historic average of 5% by 2018. This will have a knock-on effect on mortgage rates with increases particularly hitting homeowners with high loan-to-value variable or tracker mortgages.
 
"Although there has been a recent return to real wage growth across the country, household spending will need to be adjusted to ensure rising payments can be made.
 
"An increase in interest rates could also have a dampening effect on the ability of aspiring homeowners to purchase, however this is likely to be off-set by higher wage growth and greater job security."

 

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