Rising interest rates will add hundreds of pounds to monthly payments for households already struggling with other bills, lenders have warned.
Paul Broadhead, of the Building Societies Association, said: “As people roll off fixed rate deals, their payments will go up. In isolation it may not be a huge issue for many households but the problem is that it’s not in isolation.”
Three-quarters of mortgages are on a fixed rate. However, 1.3 million of them come to an end this year.
As owners come to sign new deals, they will find rates on mortgages have risen.
According to the association, someone who took out a two-year fixed rate mortgage for £130,000 in 2020 is likely to find their monthly payments increase by an average £79 if they agree a new two-year deal now.This is a rise of £948 over a year.
If they have a mortgage for £260,000, their payments will rise by £158 per month, or £1,896 per year.The precise sums can vary.
A homeowner who took out a five-year fixed rate mortgage for £130,000 in 2017 is likely to find their payments increasing by £35 a month, or £420 per year, if they agree a new five-year deal now.
Mr Broadhead said: “Consumers are worried. Every household across the UK is starting to feel the pinch.
“The fact is, everything is going up and the mortgage payment is another thing people have to cope with.”