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Homeowners expect to pay more for mortgage in the future.

MORE than three quarters of homeowners in Wales expect to have to pay higher interest on their mortgages in the years ahead but most expect the increases to be moderate, a survey has found Legal & General's latest Mortgage Mood survey has revealed that 77% of homeowners in Wales fear a mortgage rate rise in the next 12 months, but the majority of that group (42%) believe that rates won't increase by more than 1%.

Looking forward two years, 57% of homeowners in the region feel that rates still won't increase by more than 2%, with only 17% predicting an increase of 3% over the next 24 months.

is shows that is shows that Wales is in line wales is in line with the rest of country, where 45% of respondents don't expect interest rates to rise by more than 1% in the next 12 months.

e research formed part of the quarterly survey run by Legal & General Mortgage Club, which tracks the attitude of homeowners across the UK on a range of mortgage related issues.

e report also revealed that the historically low rates characteristic of today's mortgage market have distorted homeowners' perceptions of 'normal'.

More than a third (36%) of those surveyed felt that 'normal' interest rates for a mortgage would be between 1.1% and 4%.

Jeremy Duncombe, director at Legal & General Mortgage Club, said: "It is encouraging to see that a large proportion of homeowners understand that a rate rise is likely over the next 12 months, and we agree with the overall sentiment that this will probably be under or around 1%.

"Despite this market awareness, the majority of homeowners are still not actively seeking to remortgage while they have the opportunity to take advantage of historically low rates.

"is can perhaps be explained by the fact that so few people seem to know what 'normal' looks like."

He added: "In the short to medium term, rates will go up and the market will return to levels which we have seen previously.

"Borrowers should be planning now for a rate rise, and have a strategy in place which enable them to cope with increased mortgage repayments."

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Title Annotation:Business
Publication:Western Mail (Cardiff, Wales)
Date:Aug 16, 2014
Words:360
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