I think it will cause a lot of people problems, colski - though at least the Governor of the Bank of England has gone on record to say that any rises are likely be very slow and limited.

Creditors don't get a say in it though, when it comes to Trust deed contributions - it is purely up to the Trustee to vary the level to accommodate changes in circumstances.

I'm the same Kevin, I think it will have an impact on a lot of households and as a result we may seen an increase in the number of people entering into a Trust Deed, DAS or Sequestration in the future. With interest rates being low and mortgage payments as a result it meant people had extra money per month to help service their unsecured debts. Once the interest rate increases that extra money will reduce and could tip them over the edge as they focus on paying the mortgage.

It's pretty much the Trustee that controls the majority of a Trust Deed colski. It's their job to calculate your payments and then review this throughout the Trust Deed. If someone's circumstances change then their payment should be reviewed and changed accordingly which the creditors don't have a say in.

I took the security of a fixed 5 year deal on my mortgage recently so I had an idea of what we would pay and to ensure we had a bit of stability in our budget with a second child on the way.

As an eternal optimist! I don't think there will be any significant change before the next general election which I think is May next year. The worry is what happens after this.

I seem to remember promises that VAT would not increase, shortly before it went to 20%. It's quite frightening as you say Colski that even a 1% rise can increase a payment by £100+ which will have a knock on most people's budgets. The scarier part is remembering interest rates @ 17% many moons ago.

Mark

Just after I posted I received a report from the Money Advice Trust titled ÔÇ£Changing household Budgets ReportÔÇØ.

It goes on to explain that since 2007 they have seen a rise of 140% in callers to their service regarding people who are struggling to afford their basic household budget such as energy bills, water bills, telephone bills and council tax.

The Money Advice Trust also recognise that with interest rates due to increase they see their role as being vital to helping families deal with these changes.

What's also interesting is they make reference to a BBC survey today that reports 69% of adults in debt have not sought advice.

It just shows that there are far more people struggling with household budgets than what we think and that's it's a very real problem facing families.

Thanks Kevin and David.

It is quite worrying. We are under pressure but it is manageable for us as it stands by simply cutting back where we can. I would love to go into a fixed rate but sadly with the PTD in place it's not an option. Effectively we are now mortgage locked in and at the mercy of the provider.

If rates start to go up I will definitely have to speak to our Practitioner to review money. That presents a whole new issue for us as our PTD were with RMS which is now with Apex and I have had limited coms with them to date. I am sure it would be fine but it's going to be about building up the trust with them again as the provider which I had already established with RMS.

I guess it gives me something else to worry about lol.

Hi Mark,

This will make you feel old (Sorry) but my mum and dad talk about those times also.

They moved into their first house just as the rates shot up and couldn't even afford carpets for the first year. Changed times from that point. That said their first house bought in 1973 only cost £8k for a brand new 4 bed. Changed times!

Have you tried asking your current mortgage lender, colski? Whilst your chances of remortgaging to another lender are probably nil, is switching to a fixed rate product with the same lender not possible? After all, you already owe the money to them, it is not as if they are taking on any extra risk.

In general terms I'm not sure this (whether a lender will allow you to move to a fixed rate when your existing mortgage expires) is a "trust deed" issue.

Some lenders offer replacement products to their customers. Some lenders just move them onto the standard variable rate. Some lenders sometimes offer replacement products and sometimes don't. I haven't heard that a lot of them make a credit assessment before making a choice on this, though there might be exceptions.

Where this becomes a particular issue is for anyone with an imperfect credit record (which is a fairly large percentage of the population) or for anyone with very little equity (or negative equity). Obviously in these circumstances the option to switch to another lender is unlikely to exist.

Like David, our colleague who most recently took out a new mortgage obtained a five year fixed rate.

I think it's important to remember that trustees will be dealing with a significant proportion of their client-base experiencing increased mortgage costs when the time comes. They'll have to think through policies on this that are fair to creditors and clients.