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One-third of 5.7 million people who took out mortgages between April 2005 and September 2007 could face problems, said the Financial Services Authority (FSA) this week, as many struggle to renew two-year fixed-rate mortgages at higher rates over the next 18 months.

But, actually, there's grounds for hope as HSBC has announced a RateMatcher guarantee for existing borrowers rolling off existing deals, available at least until the end of April'.

On payment of a fee, which in most cases will be less than £500, borrowers will be able to refix over two, three or five years at exactly the same rate.

Where HSBC has dared to tread, rivals chasing mortgage business in a sagging property market will doubtless follow. Non-HSBC customers ending fixed rates might get one of the bank's fixed or discount loans, including a two-year fix at 5.46 per cent or a 4.99 per cent two-year discount mortgage (fee £1,999).

So the FSA's nightmare might not be on quite the scale which it has suggested.

That's the problem with the credit crunch; few can tell the difference between fears and facts. Private investors are so spooked, says the Investment Management Association (IMA), that they withdrew £377.4 million from managed funds in December, the highest total ever recorded. Much of it presumably went into building societies and low-risk savings like National Savings, maybe even Premium Bonds.

Is that sensible? "When retail investors give up," one seasoned observer noted the other day, "it is often time to buy."

Managing household finances effectively through 2008, for many of us, will demand a balancing of doom-laden reports with more cheerful pointers.

Says Tim Moss, head of loans and debt at moneysupermarket.com: "Even in the dark days between 1990 and 1992 when mortgage rates hit 15 per cent, unemployment exceeded 10 per cent and inflation peaked at 9.5 per cent, the highest number of repossessions in a year was 75,000.

"The Council of Mortgage Lenders sees far fewer clouds on the horizon now than in 1991, and expects 45,000 repossessions this year.

"Many people are in a flap about the credit crunch, but the reality is it will only have a serious impact on a very small minority of the population.However, we are entering an era when we need to be much more careful with cash."

10:24am Tuesday 4th March 2008

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