Financial turmoil 'will send mortgage rates soaring'
Financial turmoil 'will send mortgage rates soaring'
Thursday 18th September 2008
Over the last three days, lenders have been battered by the collapse of US investment bank Lehman Brothers and the dramatic fall in HBOS share prices.
In response, advisers are warning that the knock-on effect of these events will be that mortgage rates will rise again.
Eamonn Rice, mform.co.uk chief executive, said: "Just when it looked like there was light at the end of the tunnel for the mortgage market we are now heading back to a period of rising rates."
Mr Rice's comments were echoed by Louise Cumming, head of mortgages at Moneysupermarket.com, who also predicted a rise in the cost of borrowing.
News that mortgage repayments are set to rise comes as consumers are being hit hard by higher energy and food bills.
The combined squeeze on household finances of these factors is expected to lead more and more people to seek out debt management plans and individual voluntary arrangements (IVAs) as the year continues.
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