Interest Rates For Mortgages Might Skyrocket Over Next Five Years

When the housing bubble burst in 2008, it was a wake-up call for a lot of people. Foreclosures skyrocketed, and the economy tumbled for a long while. What’s worse, we know it’s only a matter of time before it happens again. Sadly, that might be a lot sooner than most of us think. If you’re in the market to buy a house, you might want to analyze the market outlook before you make the final decision. The last thing you want to do is make a purchase you can’t afford.

The situation looks dire overseas.

Industry analysts at the Office for Budget Responsibility expect that most Brits will end up spending about 33 percent more for mortgage payments or debt in five years than they do now. Part of this rise is due to an increase in debt servicing costs, which are expected to go up nearly 30 percent by the year 2023. The Bank of England is set to prop up interest rates within the next few months, which could serve as a catalyst for new economic woes. If things don’t change soon, how many of those otherwise responsible citizens will lose their homes?

Part of the problem is that this is a reverse in the current trend: over the last five years, the same costs went down about 9 percent. Because of shockingly low-interest rates during the same time period, the costs didn’t amount to as big of a slice of the household income pie that they once did.

According to the Bank of England’s governor, Mark Carney, the strong economy is to blame for the likely interest rate hike. That strong economy might not last, though. U.S. stocks have been tumultuous as of late, and the world market has experienced a few blips on the radar as well. Most analysts believe a recession is in the future, but they don’t seem to be in agreement as to when that might be.

The gap in wealth is just as apparent in Great Britain as it is in the states, and the tax freebies provided for the rich are heavily criticized. Other economists believe most of the burden will be felt by wealthy homeowners anyway. Even though the problem might have a predictable outcome, a solution that works for everyone might be harder to find, but any collection defense agency will help if you are feeling the pressure of interest rate hikes.

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Melissa Thompson

Melissa is a mother of 2, lives in Utah, and writes for a multitude of sites. She is currently the EIC of and writes about health, wellness, and business topics.