Three million people admit they struggle financially because of recent rises in their mortgage payments, with just over two million saying they may have to consider selling up if interest rates rise again.
Despite the base rate remaining steady this month, the cumulative effect of five rises over the past year has led to millions facing financial hardship. Just over half those people now experiencing financial difficulties – 1.5 million – are on a standard variable rate leaving them exposed to further rises and on some of the highest rates in the market.
In addition to those struggling to pay their mortgages, another four million say that as little as £40 extra per month on top of their monthly mortgage payments would cause them financial difficulty. Of these 1.4 million say as little an extra £20 a month would give them financial problems.
The research shows that it is older homeowners have been worst hit by a year of interest rate rises.
The impact of another quarter point rise on an average 25-year repayment mortgage of £109,000 would be around £210 per year, leaving many homeowners forced to make lifestyle sacrifices in order to meet their mortgage payments.
Mark Chilton, chief executive of Purely Mortgages, says: “We may yet get another interest rate rise this year and if that happens figures like these will only get worse. Although interest rates are still historically low it doesn't take much for people to feel the pinch, especially older people and those on lower incomes.”