Mortgage rates report slammed

A report suggesting that many mortgage lenders are set to see their rates increase by 35 per cent has been rubbished.

The report claimed that people who took out five-year fixed-rate mortgages in 2003 will get a repayment shock when their current deals come to an end.

Mortgage Monitor claimed that around 340,000 borrowers would have to remortgage at rates 35 per cent higher than they originally had.

However, Newcastle Building Society has slammed the firm and suggested that was scaremongering.

"I would be interested to see the basis of the Mortgage Monitor research as an increase of more than 35 per cent seems on the high side," commented Steven Marks from the firm.

"If you consider that mortgage rates were around 4.4 per cent five years ago and you can now find rates of just 5.5 per cent, on a £150,000 mortgage this is an increase of just £138 per month.

"If we look at average earnings over the same period you can see that monthly pay has increased by £358 per month," he added.

Newcastle Building Society added that it is "wrong to scaremonger as reports such as these often do".

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