The Council of Mortgage Lenders (CML) has revised its interest rate predictions to include an expected increase of at least 0.25 percentage points by the end of the year.
The CML had previously indicated that there was unlikely to be any change in the base rate of interest before 2007 but recent economic changes have led to fears that rates could rise sooner than first thought.
Bernard Clarke, communications manager for the CML, commented: "We are now expecting an increase [in interest rates] to 4.75 per cent by the end of the year, as opposed to the 4.5 per cent we had been expecting earlier.
"It is likely that the impact of an interest rate rise will be passed by lenders to their customers, so that would make payments rise," he continued, but tempered this comment by noting that "4.75 per cent will be the peak".
"We are forecasting there will still be a level of 4.5 per cent by the end of 2007, and then it will start to go down in 2008."To read more about banking, click here.
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