Mortgages, Loans & Credit Cards - b.3cdn.net

No Thanks Factsheet

Mortgages, Loans & Credit Cards

As part of the UK we all benefit from cheaper bills for everyday things. Having the back-up and the strength and security of the larger UK economy means that we all save money from lower borrowing costs. Impartial experts have said that interest rates would increase if we leave the UK. This means higher mortgage repayments, higher credit card and store card bills and more costly car loans.

In these economically uncertain times, Scotland has the absolute reassurance that comes from the financial back-up of being part of the United Kingdom. We all know that things are hard enough at the moment ? the last thing we need is for everyday costs to become more expensive making it harder to make ends meet.

Impartial experts at the National Institute for Economic and Social Research estimate that leaving the UK would put up interest rates by 1-2%. This would hit all of us in the pocket as mortgage repayments, credit and store card bills, and car loans would all become more expensive.

There is a better way. We can have the best of both worlds: a lower cost of living with lower mortgage and credit card repayments AND the strength, stability and security of being backed by the larger UK economy. The wrong choice for Scotland would be leaving the security of the UK that we now know would put up costs for Scottish families. It's a risk we don't have to take.

The 3 things you need to know

LOWER MORTGAGE REPAYMENTS ? Small increases in interest rates mean significantly higher repayments. Even a one per cent rise in effective mortgage rates would cost the average Scottish household with a 75 per cent mortgage around ?1,300 in increased payments in the first year.

For Scottish households with a 90 per cent mortgage, a one per cent rise in rates would be around ?1,590 increase in payments in the first year. For first time buyers it also means having to save more for longer just to meet higher interest repayments.

LOWER CARD BILLS ? It's not just mortgages that would rise significantly. Leaving the UK would mean the average household credit card, catalogue and store card bills would rise by around ?120 a year.

DEFAULT = DISASTER ? Alex Salmond's reckless threat to default on our debt would significantly increase borrowing costs still further. People know that refusing to pay your debts means a bad credit rating and that makes everything more expensive. If Alex Salmond followed through on his threat to default, the increased mortgage costs could sky rocket to ?5,200.

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What the experts say

Dr Angus Armstrong, NIESR Director of Macroeconomic Research: "Estimate that an independent Scotland would face additional interest rate costs of between 0.72% to 1.65% above the UK borrowing costs for 10 year debt."

Oxford Economics, in a report for the Weir Group: "The prognosis for funding costs may be even more adverse than the Armstrong and Ebell results suggest. Their analysis was undertaken for the 2000-12 period during which North Sea revenues were more than three times higher (as a proportion of GDP) than they are now expected to be in the decade after independence."

With the Panama Plan, the debunked plan to use sterling without monetary union:

Dr Angus Armstrong, NIESR Director of Macroeconomic Research: "The cost of Scottish government borrowing is likely to be the floor on private borrowing costs which, without a lender of last resort, are likely to be significantly higher than previously estimated."

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