Aviva warns that rates rise will come and mortgage costs will spiral

By Lauren Burns

As as a result of 85 months of the current 0.5 base rate of interest, many mortgage borrowers have little or no experience of an interest rate increase and the impact it will have on monthly payments.

Savings and retirement manager at Aviva, Alistair McQueen, says that an interest rate hike is an "alien concept" for the 1.5million home buyers who got on the property ladder while the 0.5 base rate was in effect. He warns however that a rise is inevitable and that even a "modest rate rise could send mortgage costs spiralling".

A one per cent increase in interest rates would see the monthly mortgage payment of a first time buyer in 2015 increase by £96 each month if they took out a repayment product, and by £141 if they have an interest-only remortgage. Those calculations are based on the average mortgage of £169,000 for first time buyers in 2015.

If you are buying a house in Northern Ireland, and require a property conveyancing solicitor to handle the legal process for you, contact Wilson Nesbitt in Belfast or Bangor by calling 0800 840 9290.