This article was supplied by finance based website Money Moments.
At long last we seem to be benefiting from lower interest rates but for some of us it was a long time coming as we were tied into fixed rate deals. But just as we think we can take a sigh of relief we hear the monthly interest may have to go up because of the euro zone turmoil which can affect our monthly interest.
The fears that some financial institution will not be able to honor there debts has a knock on affect with banks and building societies and they will have to pay more to raise the money that they will lend the homeowner.
Last week the Bank of England warned that mortgage rate rises were almost inevitable.
Head of lending Brian Murphy, at the Mortgage Advice Bureau, a national network of brokers based in Derby, says: 'Lenders are under pressure to rebuild their capital buffers and increase their profits. As their costs of funding rise, they are passing this on to consumers through higher rates.'
Britain's biggest lender, Halifax, has raised rates for 850,000 customers with standard variable rate loans this month. Co-operative, Clydesdale and Yorkshire banks standard variable rate has also been raised.
From 1 June Bank of Ireland will be the next to act: its SVR loan will rise from 2.99 per cent to 3.99 per cent.
David Hollingworth, of mortgage broker London & Country in Bath, Somerset, says: 'You can't fix your food bills or your petrol bills, but you can put some certainty into your mortgage bill by fixing the rate.' Many people are advising that now is the time to fix your mortgage rate.
Though the average cost of a fixed rate mortgage is still higher than most variable loans 4.86 per cent. If interest charges increase this could change.
There are many different deals about and borrowers with at least 25 per cent equity may qualify for better deals. The Post Office for example has a five year fixed rate at 3.59 per cent.
If you are struggling with your debt at the moment then please seek debt advice immediately to see what options are available to you.