Thousands of homeowners are set to wake up to £500 mortgage hikes. More than two-fifths of mortgage holders have no plan in place to deal with a potential increase in their monthly repayments when their fixed-deal ends, new research has found.
29 per cent of homeowners say they would struggle to afford an increase of up to £200, with a rise of £300 putting half of mortgage customers under financial stress. 70 per cent of mortgage holders are worried about their monthly payments increasing.
And two in five of homeowners would have to cut back on non-essential spending, while 27 per cent would need to limit spending on essentials such as food and utilities. Over a quarterwould use savings to cover the difference and one in ten would borrow money from family or friends new research from April Mortgages reveals.
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The Bank of England forecasts that half of UK mortgage holders could see their payments increase by 2027, with the average homeowner set for an increase of around £146 and over 400,000 mortgage holders facing a hike of £500 a month.
Rachael Hunnisett, director, longer-term fixed rate lender April Mortgages , commented: “Millions of mortgage holders are being squeezed to their limits as fixed-rate deals end and monthly repayments soar. Homeowners are caught in the crunch, with many facing higher monthly mortgage costs.
“The truth is, borrowers have better things to do than stress about their mortgage payments and the constant hassle and cost of remortgaging every couple of years. A short-term deal might look tempting, but why leave yourself wide open to payment shocks and financial headaches down the line when you could choose certainty and security.
“Locking into a modern flexible five, 10, or even 15-year fix isn’t just about protecting yourself from future rate hikes – it’s about peace of mind.”