Latest Debt News
Subprime rate rises increases risk of debt
29/08/2008 16:50:00
Subprime rates have risen 2.75 per cent since last year, increasing the risk of debt and repossession for existing holders, new research shows.
The figures, released by Moneyfacts.co.uk, also claim there are nearly 75 per cent fewer subprime residential mortgage packages on the market than in 2008.
It reports the sector now offers 1,252 products, whereas in July last year 8,148 were available.
Darren Cook, a mortgage expert at Moneyfacts.co.uk, says the rise in average rates could be problematic for those trying to avoid debt.
Mr Cook predicts the rate of repossession will rise as people's existing schemes come to an end and consumers struggle to secure a new deal.
Being made to revert to a lender's standard variable rates would be "costly", he believes, as it is currently 9.43 per cent.
He says: "Borrowers could be facing up to a £360 hike in their monthly repayments, which could be a step too far for the majority."
Figures announced earlier this month by the ministry of justice show an increase of 24 per cent in the number of possession orders issued against those who are unable to repay mortgage debt.
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