Mortgage warning as chart shows number of people facing huge hike if interest rates rise | Personal Finance | Finance
Data shows hundreds of thousands of Britons on fixed rate mortgages could see their payments soar next year, if interest rates are hiked even further. Figures from research group BuiltPlace indicate that the number of people whose fixed rate term is ending, is set to increase heading into 2023.
The chart indicates that the number of people finishing their term is around 300,000 this quarter, and will increase over the next three quarters, peaking at around 375,000 in the second quarter of 2023.
Last week, the monetary policy committee (MPC) of the Bank of England raised interest rates by 0.5 percent to 2.25 percent.
Analysts are predicting the MPC could have an emergency meeting this week to raise rates again, in efforts to curb the decline of pound sterling.
Michael Webb, managing director at Mortgage Republic, said the mortgage market has not panicked at the prospect of an emergency interest rates hike, but an increase would have a huge impact.
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He said: “We did not see rates being pulled or any unexpected notifications of impending rate changes.
“Equally, our clients have not been coming to us worried about the prospect of an emergency rate rise.
“In part, this is because the Bank of England base rate has been stable for so long that we have a whole generation that does not realise an emergency meeting can be called, and rates increased sharply at the drop of a hat.
“Most are expecting the next increase at the scheduled November meeting, but it may come sooner than that, potentially this week.
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He said: “Mortgage rates have never been flashing so loudly on people’s radars. If rates were to rise again after an emergency meeting, it would lead to an even greater rush of activity in the mortgage market.
“It may also bring the purchase market to a grinding halt due to fears of what could happen next.
“We are in a highly fluid mortgage market now, with conditions changing by the day. People like certainty and there’s not much of that right now.”
Anil Mistry, director at RNR Mortgage Solutions, said he had not yet received any updates about rates changing.
He said: “As of Monday morning, there were no updates in my inbox from lenders about their rates changing.
“However, this further highlights the urgency from all brokers where a client’s deal is ending in the next six months, to speak to their clients as soon as possible to have their mortgage and circumstances reviewed.
“Therefore, a new rate can be secured prior to any further increases of the Bank of England and in turn the lenders increasing their rates.”
Graham Cox, director of Bristol-based Self Employed Mortgage Hub, said his self-employed clients were holding off buying as they expect property prices to drop, or because they lack confidence in the market.
