There’s been a lot of coverage in the nationwide media lately about the lender of Ireland increasing rates of interest on mortgages that people thought would always track the bottom rate. Apparently there’s some small print in the home loan terms that permit this – in some instances from around 1% to around 5% in just a matter of months. If you’re affected, they shall have written to you, but it seems to relate to mortgages taken out BEFORE 2007 and either with the lender of Ireland or with Bristol & West (who were subsequently bought out). However the whole event should serve as a reminder to all or any home owners that things can down as well as up.
In the early 2000’s many landlords convinced themselves that property prices could only ever go up, and were brought to the truth by occasions from 2007 onwards back again. Today we reap the benefits of an exceptionally low Bank of England base rate, and there are whisperings this might fall further even. As a result many people are fortunate to have very low tracker mortgages – but it will not always be such as this. Interest rates, in the medium term, can only go one way, and practical landlords shall to consider how they will respond when their rate starts creeping up. Others, certainly, will somehow allow themselves to think that low rates shall last for ever. Then of course you have the rental value of the property itself.