The number of people with credit card debt and personal loans has never been higher and the latest interest rate rise is only going to put people's already strained finances under increasing pressure. In fact, recent reports suggest that already, 1.2million utility bill payments are being missed every month because homeowners cannot afford all the bills and credit they have committed themselves to*.
The latest interest rate rises now mean that a typical ?125,000 is now ?130 more expensive than a year ago. In fact, it is reckoned that as much as 44% of a family's income is now being swallowed up by mortgage costs. So, it's fair to say that if interest rates continue to rise at this pace, homeowners really could find themselves struggling to make their repayments in the future.
In the back of everyone's mind is that interest rates will rise as high as they did in the 1990s (in some cases interest rates rose to as much as 19%), which is why more and more of us are looking for secure ways to protect our mortgage payments in case they do increase in the future.
So, is there a way to avoid your mortgage payments spiraling out of control?
Fixed rate mortgages are one way to protect you and your home against the current period of rising interest rates. Put simply, these types of mortgages are set at a specific interest rate for a number of years, which can't be changed for the period of the mortgage. This means you know exactly what to budget for every month until the mortgage term finishes.
This will mean that there is less chance of your home being repossessed because you have missed mortgage payments, and you won't having a black mark against your name.
Fixed rate mortgages really are worth considering when the financial climate is so uncertain.
