Homeowners face big rise in mortgage costs

Homeowners face big rise in mortgage costs

The worst should have been behind us by now but interest rates are continuing on
their seemingly endless upward march and for mortgage holders like Ahmet it means
more misery. It was about 790 per month and it’s up to 1,400 nearly 1,450 now.
Where are you finding the extra money? It’s basically the extra hours we work
you know we’re on a contract and obviously we work outside of our
contract doing extra hours. How many hours a week do you work now? Well we’re
on a 39-hour contract and we’re probably doing double that, maybe more.

Mortgage rate rise Who will feel the most pain
Ahmet is not alone. Across the country lenders are hiking mortgage rates in
response to growing expectations that the Bank of England will continue to
raise interest rates because inflation is not coming down fast enough.
They’ve also been pulling products from the market. A lot of these lenders may well
be temporarily withdrawing their ranges but we are urging borrowers to obviously
have a look at what deal you have right now, see with your broker if you can
refinance because a lot of lenders are pulling fixed rate deals. The latest data
from the mortgage market shows that average two and five year fixed rate
mortgages are both now above 5%. Their approaching levels last seen in the
autumn at the time of the mini-budget. That means for the average household
looking for a two-year fixed rate mortgage repayments have gone up by more
than £340 in the last 18 months. And they could go even higher. It’s an
unpalatable reality but when you combine it with soaring food and broadband bills
as well as rising taxes it very quickly becomes unbearable. Many households are
already running down their savings and are desperately hoping that things start
to improve. In the coming months we should see food price inflation slowing
down to some degree and if that adds up to signs that inflation is becoming less
sticky that will mean that the Bank of England doesn’t have to raise rates by
as much to slow the economy and bring inflation under control. And that could
mean mortgage rates peak at a lower level. Households will certainly be
hoping this is the case because many cannot afford for things to get much
worse. Gaurpreet Narwan, Sky News.

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