When asked if the recent interest rate rise hit subprime mortgages particularly hard, Martin Oakland, consultant at Nottingham-based internet firm Mortgages-Online, said all mortgage products were affected just as hard as one another.
The interest rate level recently hit 5.5 per cent, its fourth increase since August last year, and a further rate rise to 5.75 per cent was anticipated in a recent Organisation for Economic Co-operation and Development report.
Oakland suggested that the risk of repayments had not necessarily increased, particularly for those on a fixed rate mortgage, although he revealed that people with a variable rate may be in danger: “It’s going to be a potential problem right the way across the mortgage industry, not just subprime.
“The thing about the subprime industry is that, although the rates are slightly higher to start with, the increases are just the same across the board. I wouldn’t have thought this would hit the subprime market any harder.”
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