Cuts to Bank Rate may be expected to ease some short-term financial pressure this year, but a report from the Bank of England suggests that mortgage payments are likely to rise for around three million households by 2026.
Prepare for an increase
The Bank observed, The share of households spending a high proportion of their income on mortgage payments is still expected to increase slightly over the next two years. It is predicted that, by the end of 2026, about 30% of mortgage holders will be subject to at least a £100 increase in their monthly payments. A typical household will see their repayments go up by 28% to £180 per month, but around 400,000 borrowers could have an increase of 50% or more.
Households show resilience
Although this is concerning, the Bank commented that UK households and businesses have remained resilient to the impact of higher interest rates. Also, it is forecast that the number of mortgage holders who cannot meet their payments will remain below the figure seen following the 2008 financial crisis.
Don’t panic, seek advice
We can help you to manage your finances, considering any potential increase to your mortgage repayments.
Your home may be repossessed if you do not keep up repayments on your mortgage