Almost a million households will face mortgage increases of more than £500 a month in the next three years 📉 It is the equivalent financial hit of a £10,000 a year pay cut, theipaper analysis has shown CallumCMason reports:
They would collectively be taking home £62,444 on £40,000, and if their pay was each decreased by £4,500, they would take home £56,324 together – £6,100 less.Fixed rate mortgages have taken over the peak seen after Liz Truss’s mini-Budget last year.
And the situation is expected to get even worse as the financial markets are forecasting rates will hit as high as 6.5 per cent by early next year with mortgage rates predicted to reach 7 per cent by the end of summer. The situation is in stark contrast to recent years, when some households have been able to secure mortgages at rates of less than 1 per cent.
Those with a £200,000 mortgage at a rate of 6.1 per cent, would be seeing monthly payments that are £500 per month higher – going from £800 to £1,300 – than if they had taken a mortgage out on the same property at 1.5 per centRay Boulger, of brokers John Charcol, said yesterday: “Anyone whose current fixed rate ends in the next six months should discuss options with their broker soon as many lenders allow rates to be reserved up to six months in advance.
“Several lenders offer cheaper rates for existing customers than for new customers and if rates subsequently fall many lenders allow the borrower to switch to a new cheaper rate at no extra cost.”
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