Rumors have begun to circulate that despite the long time forecast that 2013 will end with the Bank of England’s Monetary Policy Committee (MPC) leaving the standard base interest rate unchanged they may pull an unexpected move.  Warnings are now being issued by many economists that borrowers could be facing higher interest rates next year.  The reason is that the next year could bring signs of a solid recovery for the economy as well as rising inflation.

A rising interest rate would put many homeowners in a difficult position as it is reported in a survey conducted by NMG Consulting for the Bank that a little over 40% of households are concerned already with their debt levels and more than 20% are struggling to make their repayments on their mortgage debt.  Currently the standard base interest rate is at 0.5% and it has been so since March 2009.

Those that are already finding it difficult to meet their repayments will find an increase in their mortgage interest rate hard to handle if not impossible.  There are also many homeowners that are currently sitting on their lender’s standard variable rate (SVR) having completed their current mortgage deal.  Those that are paying their mortgage with a SVR or are close to ending their current mortgage deal should pay close attention to the warnings of increasing interest rates.

There are many attractive interest rate offers for fixed rate remortgages which could provide security for a homeowner from rising interest rates that could be difficult to face with a set household budget.  It also could provide welcomed savings by offering an interest rate below any increases that could be seen in the future year.