Fear of a £1,300-a-year hike in mortgage costs if interest rates rise
HOMEOWNERS face paying an extra £1,300 a year on their mortgages by the end of 2015 if interest rates rise.
An increase in the base rate from its record low of 0.5 per cent to 1.5 per cent would add £1,312 to the annual burden for a household on an average 25-year interest-only mortgage of £131,215.
This equates to nearly £110 a month, according to analysis by property agents Savills.
The base rate has been held since March 2009 but soaring house prices and a turnaround in the economy have led to calls for a hike.
The Bank of England says this would be gradual but it has signalled a possible rise by the end of this year.