Successive interest rate rises, combined with soaring bills, are causing concern among borrowers worried as to whether they will be able to afford their mortgages, a Anthony Ward Thomas survey of 2,000 respondents finds.
With the Bank of England (BoE) widely expected to raise interest rates again on Thursday for the seventh time since December, those who don’t have fixed-rate mortgages, or whose fixed-rate mortgages come to an end over the next 12 to 18 months, are concerned as to how much their home loan will cost them.
In August, the BoE raised the base rate by 50 basis points, lifting interest rates to 1.75%.
It represented the highest rate rise since 1995, and the greatest increase since the central bank was given control of the crucial decision.
The survey found that 25% of borrowers think it is somewhat unlikely or very unlikely that they will be able to afford their payments were interest rates to hit 5%.
A further 13% said they didn’t know whether they would be able to pay their mortgage in this scenario.
Anthony Ward Thomas says the prospect of 50-year mortgages got the thumbs up, with longer terms meaning lower monthly payments.
More than a third of respondents interested in buying a new home said they were very or somewhat likely to opt for a 50-year mortgage if it improved their affordability.
The threat of further rate rises is not putting off all home movers, however, with 24% of respondents still planning to move within the next year.
However, respondents remained bullish about the prospects for the market, with 67% confident that property prices would either remain the same or rise over the next year.
Only 15% thought prices would fall, while 18% didn’t know.
Anthony Ward Thomas removals founder Anthony Ward Thomas says: “The soaring cost of living is a growing concern. Interest rates are rising as the Bank tries to control runaway inflation and borrowers are clearly worried as to just how high they will have to go.”
“Throw in higher energy, fuel and food bills on top of greater mortgage costs and it is no surprise that people are increasingly uneasy.”
