Some 53 per cent of homeowner loans held with building societies will not be affected by the Bank of England’s (BoE’s) recent base rate rise, it has been claimed.
This week, the national interest rate was increased to 5.25 per cent, although it was widely expected to remain at five per cent until later in the year.
Yet the shock announcement is being followed by a message of “don’t panic” from the Building Societies’ Association (BSA), which said that many homeowners had anticipated a rise at some point and consequently entered into fixed-rate loans that would be protected from such an event.
But Adrian Coles, the BSA’s director-general, maintained that those who feel their personal loan or credit card repayments may be affected by increased mortgage costs should contact their lender “before things spiral out of control”.
However, he added: “The majority of people borrowing from building societies will not see an immediate difference to their mortgage payments.”
The past six months have seen three increases to the BoE’s interest rate – in August and November 2006 in addition to the current month.
© Adfero Ltd