The page also contains a number of illustrative tables, showing how the latest rise will impact on homeowners, according to their mortgage amount and type and how much the average payment is likely to have gone up in the four rises since August 2006.
For example, a person with a £175,000 mortgage, with 25 years remaining on their mortgage and a current APR of 5% will see a monthly payment increase of approximately £26 on a repayment mortgage, or £36 if paying interest only.
Andy Davie, site manager and spokesperson for IVA.co.uk, said: “The rise in interest rates will clearly affect the financial situation of many people in the UK, but it will be particularly serious for people in Individual Voluntary Arrangements. IVA budgets are calculated to the nearest pound, usually leaving a contingency of around £50. The mortgage payment rises caused by today’s base rate rise will eat into that contingency, leaving no money for other unforeseen circumstances. Unfortunately, this will increase the likelihood of the IVA failing, leading to enforced bankruptcy in many cases. All is not lost, however, and some agreements can be renegotiated in light of a change of circumstances.”
