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Freedom Finance launches new campaign against rising future interest rates

Freedom Finance has urged UK families to examine their finances after revealing that an average mortgage bill could increase more than £750 due to a future interest rate rise.

Analysts predict higher interest rates are likely to occur sooner rather than later, despite the Bank of England agreeing to keep the base rate at an all-time low of 0.25%.

Freedom Finance reviewed its consumer database to provide a summary of the nation’s mortgage finance from July, which showed the average family has a £130,000 mortgage on a 19-year term. A 1% rise on a lending rate of 2% would equate to an extra £756 a year.

Andrew Fisher, MD of Freedom Finance, said consumers should do their sums now to grasp how the impact of a small increase in interest rates and could potentially affect their monthly mortgage payments.

He commented: “Once families are armed with the right information they are in a much stronger position to take action to ensure they’re on the best rate for their circumstances and aren’t spending money unnecessarily.”

In response to the recent findings, Freedom Finance has launched its #LowRateLockIn campaign to aid customers in understanding the impact of a rate rise on their mortgage repayments via its online calculator.

“It’s easy to feel helpless when encouraging financial news has been so thin on the ground for such a long time,” Fisher said. “As a country, we’ve become used to financial restraint – everyone from the Chancellor of the Exchequer to the average homeowner has been forced to tighten purse strings.”

Fisher believes that it’s unlikely that we will see an increase of 1% per month. Many people in the UK will have to factor in a substantial extra cost, meaning that they will have to reduce how much they save. 

“Anything which adds costs to the family budget will have an impact, and for many people even a modest increase can significantly erode disposal income,” he warned.

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