Cost of borrowing set to rise for home-owners

With both those with a small deposit and first time buyers set to be affected by the increase in the cost of borrowing, it looks like more people will be renting and for potentially longer that they anticipated.

The cost of borrowing rose between March and May this year as banks passed on the increased funding costs, and this trend is set to continue, curbing the availability of loans to households. 

The UK’s top lenders were hit with a humiliating credit rating downgrade last week, which means they could be forced to pay billions of pounds extra to raise funds.

The additional costs are likely to be passed on to households and small businesses, through increased rates on loans and mortgages.

Borrowers with small deposits are also likely to see a marked decline in the number of mortgages available to them, with rates steadily increasing.

Lending conditions are set to be tightened even further, making it harder for first time buyers to get a mortgage. 

Read the full story at This Is Money

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