The average household with a standard adjustable rate mortgage will pay an additional £ 510 per year in 2023 as interest rates rise, the Liberal Democrats have found.
Halifax said Thursday it would hike rates on several of its mortgage transactions by 0.2 percentage points from November 1, and Barclays announced a 0.35 percentage point hike. HSBC also said it would hike rates, while NatWest hiked rates by 0.1 percentage point.
The increase will put further pressure on household finances, which face around £ 3,000 a year in additional taxes as well as rising costs for basic necessities including energy and food.
Along with the Chancellor’s statement on Wednesday, the Office for Budget Responsibility (OBR) released its forecast for the UK economy, including a prediction that rising inflation will prompt the Bank of England to raise its rate benchmark interest rate of 0.1% to 0.75%. by the end of 2023. In the worst-case scenario of the OBR, rates would climb to 3.5%.
The Liberal Democrats calculated that an average borrower who currently pays 3.26% on a variable mortgage would see their monthly payments increase by £ 42 per month, or £ 510 over a year. This would equate to a 13 percent increase in their annual mortgage payments. A borrower with a 2% fixed rate mortgage would pay an additional £ 300 per year.
Liberal Democrat Leader Ed Davey said, “This Conservative Chancellor created the perfect storm. Now is the worst time in a generation to own a home.
“UK homeowners are facing the poisonous cocktail of fast approaching interest rate hikes, soaring house prices and municipal tax hikes.
“People who work hard and play by the rules deserve a fair deal. Enough is enough: it’s time to ditch the tax hikes, solve this cost-of-living crisis and defuse this mortgage time bomb.