Many UK house owners owning a variable rate mortgage have been quite concerned with the possibility of a rising mortgage payment after the rise in base rate takes place. The rise in base rate is expected to take place within the next twelve months, according to many close to the housing market. The Bank of England is laying out a message indicating house owners have little to worry about due to the slow pace of the subsequent increases in interest rates which will take place after the initial rise.

Ever since the Central Bank made notice of the rise in interest rates back in the summer of this year, house owners have been walking around with a nervous stomach. They have envisioned the worst possible scenario. That is their house mortgage payment going through the roof and the monthly cost so high it would cause them to have to move home. This will not come to fruition according to the BoE. It will not take place because the rate rise will be so slow.

There is expected to be two increases of the rate after the initial rate increase of just 0.25%. This increase will place the base rate at 0.75%. Two more increases of the base rate are expected by the end of year 2018.

Lucian Cook, Savills’ director of residential research, commented on the increase in base rate, saying: “Rising interest rates are more likely to act as a drag on house price growth than result in a significant rise in mortgage arrears which might disrupt the market.”

Those seeking a remortgage before the first rise in base rate still have time. Many lenders have attractive deals which should last through the next few weeks.