The announcement by the Bank of England that the interest base-rate rise is set to rise to 5.75% will not be well received by millions of homeowners across the country. The number of people with credit card debt and personal loans has never been higher and the latest interest rate rise is going to put people's already strained finances under increasing pressure. In fact, recent reports suggest that already, 1.2million utility bill payments are being missed every month because homeowners cannot afford all the bills and credit they have committed themselves to.

The latest interest rate rises now mean that a typical £125,000 is now £130 more expensive than a year ago. In fact, it is reckoned that as much as 44% of a family's income is now being swallowed up by mortgage costs. So it's fair to say that if interest rates continue to rise at this pace, homeowners really could find themselves struggling to make their repayments in the future.

In the back of everyone's mind is that interest rates will rise as high as they did in the 1990s (as high as 19% in some cases), which is why more and more of us are looking for secure ways to protect our remortgage payments in case they do increase.

Fixed rate mortgages are the perfect way to protect you against the current period of rising interest rates. Put simply, these types of mortgages are set at a specific interest rate for a number of years which can't be changed for the period of the mortgage. This means you know exactly what to budget for every month until the mortgage term finishes.

Over the last couple of years, interest rate on mortgage loans have been increasing gradually. Rising interest rate present a difficult situation for new Guaranteed cheap adverse credit mortgage borrowers. The dilemma is whether to opt for floating rate guaranteed cheap adverse credit mortgage or fixed rate for mortgage loan guaranteed cheap adverse loan or the hybrid loan, which is a combination of the above.

Under a fixed rate for guaranteed cheap adverse credit mortgage, the rate of interest is decided before hand, at the time of taking the loan. The rate remains the same during the life of the tenure of the guaranteed cheap adverse credit mortgage loan irrespective of the market rates of interest. In case the interest rates go down, the borrower tends to lose as he has to pay a higher interest as compared to the market rate of interest.

In case of floating guaranteed cheap adverse credit mortgage rate, the rate of interest is linked to the market rate or a benchmark rate, for example the prime lending rate of the bank. Thus a borrower floats along with the market rates of interest and has to constantly monitor the market movement of interest rates.

Guaranteed Cheap Adverse Credit Mortgage!

Then there is the hybrid loan. These loans combine features of more than one product. Simply put, traditionally, one could opt for either a fixed rate or a floating rate one. Hybrid loans combine the features of both the loans. The variants may be different. Such loans are offered in addition to the traditional pure loan products. The borrower has a choice of which cheap guaranteed adverse credit loan he wants to opt for.

Each product introduced by the different banks has its own distinctive features. Some banks offer a certain percentage of the loan amount to be at fixed rate and the balance at the floating rate. Others offer a fixed rate of interest for the first few years and then it would be floating – depending on the market rates of interest. The interest rates will remain fixed for the first few years of the loan tenure only. After this initial period, the loan becomes a floating rate loan, and the applicable interest rates at that point of time will be applicable to the balance loan amount.

While taking an adverse credit mortgage decision, a borrower faces a dilemma – which loan to choose. Should he go in for a fixed rate loan or should he go in for a floating rate loan, or a hybrid loan. Some risk is involved in all the cases and the borrower needs to take a conscious decision after analysing some factors. One needs to analyse the general trends in the loan market or consult the guaranteed adverse credit mortgage advisors for financial guidance.