Higher rates would give a quarter of borrowers a mortgage problem
An increase in the Bank of England (BoE) Base Rate would affect 70% of borrowers, a new report from TSB Bank shows.
Even worse, a quarter could really struggle to repay their mortgage.
The research showed that, while it is unlikely that the increase will reach the 14.9% it saw in October 1989, even a small increase could affect borrowers’ abilities to keep up with repayments.
TSB’s research found that many mortgage borrowers have very little wiggle room in their monthly budgets, and 26% of respondents said they would have real difficulty if their monthly mortgage repayment increased by £99.
Ian Ramsden, director of mortgages at TSB, said: “The statistics included in TSB’s report are fairly shocking and clearly there’s a lot of work to be done to help Britain’s homeowners understand how they can accommodate a rate rise. But there is no need to panic; a little bit of planning now can make a big difference in the future.”
TSB recommended that homeowners speak to their lender early, draw up a monthly budget and get any existing debt under control.