Wed Apr 25, 2007 8:59AM EDT
Borrowers could face paying an extra £2,600 per year if the base rate rises to 7.5 per cent to quell inflation, a financial advice group has said.
Commenting on reports that rising inflations could lead the Bank of England to raise the base rate to this level, moneysupermarket.com said that a typical monthly payment could rise to £1,037.08 per month from the current £818.75.
Stuart Glendinning, managing director of the group, said: "If the group's predictions are right then mortgage borrowers are going to have it hard in the near future because this could mean standard variable rates close to ten per cent.
"The last time mortgage rates neared this level was 15 years ago."
He added that as one in five borrowers is on the lender's standard variable rate, the predicted inflation could become "a real concern".
Earlier this week, the Scotsman reported that several lenders have cancelled their fixed-rate mortgage deals due to fears of an early base rate rise next month.
Source:http://www.financenewsonline.co.uk/
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