Rates can go down as well as up

If you're considering a variable rate or tracker rate mortgage, it's dangerous to assume that the current mortgage interest rate will stay roughly the same for the period of your loan. Interest rates can rise as well as fall, and even a slight increase could seriously affect your financial health.

In much the same way that shares can go down as well as up, the current mortgage interest rate is unlikely to stay the same for the duration of your mortgage. In recent years the rates have fallen, but if the economy changes then interest rates could rise.

Even a small increase in the current mortgage interest rate could make a big difference to your monthly repayments, so it's important to choose your mortgage not just on the repayments at the current mortgage interest rate, but also on the basis of a rate increase. If you don't and you're already stretched financially, an increase in the mortgage rate could be disastrous.