Third of homeowners fear rate rise financial difficulties
The study by the HomeOwners Alliance and myhomemove found 34 per cent of mortgage holders believe they won’t be able to meet repayments on their mortgage and other debts when rates rise.
This figure rises to nearly two-thirds (64 per cent) of interest-only customers, suggesting those are likely to be hardest hit by any rise in Base Rate.
More than half of would-be first-time buyers believe rising interest rates will harm their chances of obtaining a mortgage. Younger people on the property ladder also believe they will struggle with 49 per cent of homeowners aged 25-34 fearful of a rate rise compared to 24 per cent of those over 55.
Homeowners in the East of England are most fearful of a rare rise with 47 per cent concerned about increasing rates, compared to the 34 per cent UK average.
Paula Higgins, chief executive of the HomeOwners Alliance, said: “Homeowners are already really struggling to make ends meet, and millions could be pushed into real financial hardship when interest rates start to rise.
“It shows just how severe the cost of living crisis is that a rise in interest rates could lead to some homeowners struggling to afford food or being forced to sell their homes. The Bank of England needs to tread very carefully to avoid causing widespread financial difficulties.”
Doug Crawford, CEO of myhomemove, said: “If you are worried about rising interest rates, we’d recommend you talk to your mortgage provider now and maybe consider fixing your mortgage to provide greater certainty over the coming months and years.
“Interest rates could begin to rise as soon as November of this year. Christmas could be a tough time for the thousands of homeowners who are already on tight budgets.”