What will interest rate rises mean for homeowners?

What will interest rate rises mean for homeowners?

This week, the Bank of England's governor Mark Carney has announced that interest rates are, at last, getting set to move up from the historic low of 0.5 per cent that has been in place now for some time. This will, of course, have a knock-on effect on mortgage repayments, especially for those who have bought in the last couple of years, who are going to be experiencing the first rate rise since they took on their house purchase loan.

So how will the promised gradual rises impact the property market and homeowners? According to a new survey, the answer is not very much at all, with half of all people in the UK not concerned about the effect that this will have on their repayments.

According to the survey from Halifax, the first base rate rise to hit the UK since 2007 will only be of concern to 41 per cent of people, meaning that 59 per cent are not worried about how it will affect them.

"Speculation of a potential rate rise has been high up on the news agenda for some time now so it is perhaps surprising that the majority of home owners are not concerned about this," said Craig McKinlay, mortgages director with Halifax. 

"However, with base rate historically low, and the Bank of England reinforcing its position that there will not be a rush of successive rate rises, it is understandable as to why the perceived impact of future rises is being dampened and homeowner sentiment is reflecting this," he added.

When asked what sort of rate rise would be concerning to them in the future, some 13 per cent said that as much as £50 extra on top of their repayment at the moment would be problematic. Meanwhile, 33 per cent indicated that they would find it troublesome to afford an extra £100. 

The largest uncertainty comes among those who have variable rate mortgages, with 42 per cent of this demographic saying that they are concerned about their future payments. 

So, moving forward, it seems that the majority of the UK property sector is taking a quite pragmatic outlook when it comes to their future with regards to interest rates, which will be good news ahead of rate rises to the Bank of England.