Steep rise in remortgages.
HOMEOWNERS in Wales with a pounds 150,000 mortgage are facing a four-figure rise in annual repayments when they renew their fixed rate deals.
An estimated 250,000 people will come to the end of two-year fixed rate mortgages in the coming three months, according to debt solutions firm Newtomorrow.com.
The group said people with a pounds 150,000 home loan would see their monthly repayments rise by about pounds 100 when they remortgage due to interest rate rises since they took out their previous loan.
It said in October 2005 the typical two-year fixed rate charged was 4.96%, giving monthly repayments of around pounds 885 on a pounds 150,000 mortgage.
But current two-year fixed rate deals cost about 5.79%, raising repayments to pounds 996 a month, a jump of more than pounds 100 a month or pounds 1,332 over a year.
The increase is even steeper for people with bigger mortgages of pounds 250,000, who will face a pounds 189 increase in repayments each month.
John Hall, chief executive of debt solutions firm Newtomorrow.com, said: "Several rises in interest rates over the last year have made all mortgages more expensive, and anyone coming off fixed-rate or discounted deals in the next few months will have to find extra cash."
But he added that the recent turmoil in the financial markets, combined with inflation currently running below the Bank of England's 2% target, meant the next movement in interest rates was likely to be down.
He said, "We are already seeing some better fixed-rate deals appearing. However, those who have poor credit histories may find it almost impossible to get a new mortgage deal at all as banks shirk from high-risk debt and raise interest rates further on sub-prime deals."
Meanwhile research from online mortgage firm mform.co.uk showed that there has been a 70% increase in the number of 100% mortgage products available direct from lenders during the past six months.
The rise comes despite fears that the housing market is cooling and default levels are rising.
The group said there were now 160 of the mortgages available, compared with only 92 in April.
Although it added that the number of lenders offering the products had remained the same at 22, ranging from major firms such as Abbey and Cheltenham & Gloucester, the lending arm of Lloyds TSB, to smaller regional building societies.
Mortgages that allow people to borrow 100% of their property's value are generally considered to be riskier than loans that require a deposit, as if house prices fall, borrowers are instantly in negative equity.
Francis Ghiloni, marketing and business development director at mform.co.uk, said, "The rise in the number of 100% mortgage products available demonstrates that lenders believe there is a genuine demand.
"However there are indications that the house price boom is slowing so anyone taking out a 100% mortgage is risking being stuck in negative equity. And if you add hefty fees to your mortgage the risk is increased."