Mortgage rates to double for nearly 800,000 homes this year

Aberdeenangarse

Perhaps I was being a bit naive?I hadn’t  realised it would be that many!

Almost 800,000 households are expected to see their mortgage rates more than double this year as they come off low fixed-rate deals. 

In all, more than 1.4m borrowers will face higher interest rates in 2023 as they come to renew their mortgage.

Of these, 57pc are on deals of less than 2pc, while the average variable rate mortgage is currently 4.4pc, with fixed rate deals starting at around 5pc.

The Office for National Statistics said that, based on Bank of England data, a peak in fixed deals ending is expected between April and June this year.

A typical fixed-rate borrower faces a £250 increase in their monthly payments if their deal expires this year.

https://www.telegraph.co.uk/business/2023/01/09/ftse-100-markets-live-news-energy-scheme-mortgage-rates/

dimbo61

Well our rate has gone from 3.49 to 6.99% so doubled in the last 12 months.
Worried Not at all. 
The BOE base rate has increased from 0.1% to 3.5% with more rises expected this year.
Happy New Year to all the people with mortgages 

MovingForwards

Not many people considering in 2020 there were 6.8m properties with a mortgage or loan on them, just in England:
https://www.ons.gov.uk/peoplepopulationandcommunity/housing/articles/researchoutputssubnationaldwellingstockbytenureestimatesengland2012to2015/2020

ACG

There are around 25m homes in the UK. That means only around 3.2% of homes. Although I say that and realise they are still people. 

But of those 800,000 not all of them will be bothered. As an example, my dads mortgage deal comes to an end in June, but his mortgage is not paid off until August. He will pay it all off in July, but he is one of those 800,000 I imagine. 

We also have customers who have mortgage offers due to start later this yea, whilst their rates will be going up, they are comfortable with the increases. 

So its not like there will be 800,000 struggling, it will be a lot less.

But yes, some people are going to be struggling unfortunately. 

strawb_shortcake

Yet you posted pretty much the same story last month, except that article claimed 4m would face increases this coming year
https://forums.moneysavingexpert.com/discussion/6410848/millions-face-250-monthly-mortgage-rise-next-year/p1

My rate has in fact doubled, this sees me paying an extra £50 a month so I'm not losing any sleep over it nor will many others. Not all mortgagees are on the breadline despite what many may claim.

I accept some people are struggling right now

Aberdeenangarse

annabanana82 said:

Yet you posted pretty much the same story last month, except that article claimed 4m would face increases this coming year
https://forums.moneysavingexpert.com/discussion/6410848/millions-face-250-monthly-mortgage-rise-next-year/p1

My rate has in fact doubled, this sees me paying an extra £50 a month so I'm not losing any sleep over it nor will many others. Not all mortgagees are on the breadline despite what many may claim.

I accept some people are struggling right now

So I did. Apologies…..senior moment!

[Deleted User]

Something to point out, some people are switching now, paying early repayment charges, paying more interest but paying what they can afford for a fixed rate. Not everyone is sleep-walking into calamity. (Some will struggle of course).

dunstonh

[Deleted User] said:

Something to point out, some people are switching now, paying early repayment charges, paying more interest but paying what they can afford for a fixed rate. Not everyone is sleep-walking into calamity. (Some will struggle of course).

Actually, for a lot of people that did that, it was the wrong thing to do.   All they have done is pay an ERC and increased their payments earlier than they needed to and many have gone into fixed rates that are higher than currently available.

ACG

dunstonh said:

[Deleted User] said:

Something to point out, some people are switching now, paying early repayment charges, paying more interest but paying what they can afford for a fixed rate. Not everyone is sleep-walking into calamity. (Some will struggle of course).

Actually, for a lot of people that did that, it was the wrong thing to do.   All they have done is pay an ERC and increased their payments earlier than they needed to and many have gone into fixed rates that are higher than currently available.

Thats hindsight. 

We have a few customers where we did PTs but let them sit there as an insurance policy. Some of them have since been cancelled and others have been resubmitted as a new PT once or twice over. A lot of work for no return so far, but it was the right thing to do at the time.

[Deleted User]

dunstonh said:

[Deleted User] said:

Something to point out, some people are switching now, paying early repayment charges, paying more interest but paying what they can afford for a fixed rate. Not everyone is sleep-walking into calamity. (Some will struggle of course).

Actually, for a lot of people that did that, it was the wrong thing to do.   All they have done is pay an ERC and increased their payments earlier than they needed to and many have gone into fixed rates that are higher than currently available.

You are correct but even if they could have acted less hastily (in hindsight), presumably they are still agreed to payments which are affordable to them. 

My point being that at least for some people, they can make choices which avoid a cliff edge.

amnblog

You can get blase about this if it does not affect you but consider a simple example.

Single homeowner with £130,000 mortgage in September 2022 paying £200 for energy bills. Salary £40,000

January mortgage new rate = 4.75% v 1.75% previous rate

Increase = 3% of £130,000 = extra interest £3,900

Utility Bill September 2022 £200 pcm, April £350 pcm = £150 extra cost

This is the equivalent effect of a 20% wage cut