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Comments
Accident waiting to happen
If the increase in variable rate mortgages has been a result of "non advsied" purchases direct from lenders, then if interest rates go up and people start struggling to meet repayments, this will vindicate the argument that mortgages should be arranged on an advised basis. If however it is the case that a lot of brokers have been advising variable rates and these people were tight on affordability anyway, then if rates go up I could see a lot of brokers in trouble. Either way this looks like an accident waiting to happen. The higher the base rate, to some extent the argment could be for NOT having a fix or capped rate, but with base rate as low as it is now with the increased margins being charged by lenders on their variables including base rate linked loans this could be a realpayment shock.
Posted by: Accident waiting to happen