Someone with a £150,000 interest only loan who is paying a typical high street lender's standard variable rate of 5.5% would see monthly payments rise by just over £31. The bank is urging homeowners who are concerned about their ability to manage their mortgage payments if interest rates rise, to consider switching to fixed rate mortgages.
Sainsbury's Bank's fixed rate mortgage is one of the most competitive in the marketplace with a rate of 4.39% until 30 November 2005.
Lucy Hunter, mortgages manager, Sainsbury's Bank said: "Our research shows that there are 115,000 people with monthly mortgage payments of £2,000 or more. In total, there are 595,000 people paying over £1,000 and for some, particularly those who have over-extended themselves because of the low interest rate environment, any rise in their mortgage payments could make life financially very difficult.
"Indeed, some estimates suggest that the Bank of England base rate could rise from 3.5% to 4.5% by the end of next year which would mean homeowners would pay an extra £7.3 billion a year in annual mortgage interest payments. On average, that would be equivalent to £465 for every person with a mortgage."
Sainsbury's Bank's fixed rate mortgage offers 4.39% up to 30 November 2005 for mortgages with a loan to value of up to 90%. The bank's 100% fixed rate mortgage offers a rate of 4.79% until 30 November 2005. For further information, please call 0500 30 10 30.
