http://www.bbc.co.uk/news/business-16215629rnrnPlease read this interesting article on the BBC News website and see our comments below. rnrnThe Wexdon CommentrnrnGiven the track record of the FSA the use of the term common sense always makes me laugh. From speaking with friends who have recently bought their first home in South East London, it amazes me that they have not protected themselves from significant rises in interest rates. With inflation so high and the international money supply rising far in excess of the growth in productivity the next few years see a real risk of interest rates rising. Given that interest rates have been so low by post war historical standards a return to the base rate at 5% and London Interbank Offered Rate (LIBOR) above 5% could see many people struggling to repay their mortgage liabilities. Every one taking out a new mortgage should be made to calculate at what amount their mortgage would become unaffordable. If their mortgage offer at current levels only has to rise a percentage point before it becomes unaffordable the potential borrower must be in full possession of the facts and take an informed choice about proceeding. Having seen family friends lose their homes in the early 1990s I have a lot of anxiety that many people might experience a similar fate when the interest rate cycle begins to rise again.rnrnThis is the opinion of Wexdon Financial Services and is not intended to recommend any course of action.rn
