The Liberal Democrat Party has warned that more than the predicted one million home owners may be affected by rising mortgage rates.
Its warning follows research by Mortgage Advice Bureau that up to one million home owners could get a financial shock when their two year fixed rate deals run out and they are put on a SVR.
The Lib Dems criticise the government for turning the other cheek while home owners are left to face massive mortgage hikes brought on by rises in the Bank of England base rate.
Vince Cable MP, shadow chancellor for the Liberal Democrats, says: “The assumption made by most commentators is that borrowers are gradually adjusting to rising interest rates.
“But some will face massive increases as a result switching their mortgages.
“The shock to heavily indebted borrowers is much more serious than the government or the Bank of England appear to believe.
“We can expect to see growing evidence of distress in the form of arrears and repossessions, unless the banks are willing to take a more long-sighted and responsible approach to heavily indebted borrowers.
“The recent weakening of the housing market in many parts of Britain may well reflect the difficulties experienced by many mortgage borrowers. The situation could yet get a lot worse.”