Lenders will have to make sure that customers can manage repayments at a rate of around seven per cent – far higher than the rate they are likely to be applying for.
It means borrowers will only be able to qualify for a loan if they could afford bills at the higher rate, which is around three percentage points above the typical Standard Variable Rate (SVR),
It comes as the Bank of England today warned in its bi-annual Financial Stability Report that credit card debt, personal loans and motor finance grew much faster than household income over the past 12 months.
It has prompted concern that families have been encouraged to borrow by record low mortgage and credit card rates, but could struggle when interest rates start to rise.
The Bank o…
Read the full article at: http://www.express.co.uk/finance/city/821788/Bank-of-England-financial-stability-report-UK-debt-consumer-credit-mortgages