Borrowers worried monthly mortgage payments will ramp up by £617
In November last year, 2,097 adults surveyed by The Mortgage Lender (TML) – 500 of whom have a mortgage – predicted a £176.84 increase in their monthly mortgage payment when they renewed.
Meanwhile, 80% of homeowners said they are concerned about rising mortgage rates.
Around 37% said that they were extremely concerned and 43% were somewhat concerned about growing mortgage rates.
Young people are especially concerned about rising mortgage rates at 88%, the highest of all age groups.
Approximately one in 10 said they were due to renew in the next six months, and 14% said they would renew in the next six months to a year.
Of those homeowners who are expecting an increase in mortgage payments, 28% are speaking to a lender and 25% are talking to a broker.
Around 18% are looking for a higher paying job, 13% are taking out a mortgage with a longer term, 9% are borrowing money from their parents, 7% are returning to work and 5% are returning to renting.
Only 4% are considering selling their buy-to-let property.
Nearly 19% said they would not do anything to account for higher mortgage costs and a similar number are drawing on long-term savings.
Steve Griffiths, chief commercial officer at TML, said: “With rates rising steadily over the last year, homeowners have been living with this new reality for a while now. However, as many mortgages start coming up for renewal, the affordability challenges within the market are starting to hit more mortgage borrowers.
“Indeed, when we last conducted this research homeowners expected their monthly payment to rise by £176.84, however this has now increased substantially, posing more of a challenge for borrowers who are already being hit with rising costs elsewhere.”
“It is encouraging that a significant number have taken proactive steps to address these challenges head-on. Speaking to a broker or lender can help demystify the challenge, allow you to understand all your options and guide you to the route that will work best for you and your circumstances.”