Stupid reporting

*sigh*

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“It’s worrying to see that so many think they’d struggle paying the mortgage should the base rate rise by as little as 2%. What’s also clear is that the understanding of how interest rates affect payments is incredibly low. Simply put, a rise in rates from 1% to 2% is a hundred percent increase, which means a doubling of payment. For example if you were paying £750 per month your new payments would be £1,500,” said Nick Hungerford, CEO and founder of Nutmeg.
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While ‘accurate’ it’s not a fair representation of the real world unless of course you have a interest only mortgage which is held at BASE + 0%.

A more realistic example is a £181k mortgage at 1.49%+BASE which rises by ~£200/month with a 2% rise in the base rate {not that I have a spreadsheet already setup to track this sort of thing..}

Getting across the risks of interest rate rises is a good thing but seriously guys, bring some reality into the equation so the public can actually properly assess their risk rather than trying to panic the herd.

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