For immediate release
TotallyMoney, the credit app which helps everyone move their finances forward, and Moneycomms calculate the impact of the MPC’s expected interest rate hike on the 2.2m** homeowners without a fixed rate mortgage deal:
- For the average UK property costing £270,708 with a 75% LTV, a 0.75% hike this week means monthly mortgage repayments will rise by £78*
- A 0.75% increase means customers will be forking out an extra £274* each month when compared to repayments in 2021
- A further 3.2m homeowners** will be in for a shock when their fixed-rate deals expire within the next two years. They face either being put on the SVT or needing to find a new, more expensive offer.
- The average two-year fixed-rate deal is now at 4.09% — its highest since 2014†
This comes as households continue to cope with the soaring cost of living, risking missed payments, and repossessions projected to double by 2024‡.
Full tables, highlighting the cost of potential rate increases at 0.25%, 0.5%, 0.75% and 1% can all be found below.
Alastair Douglas, CEO of TotallyMoney comments:
“Another increase to the base rate will pile pressure on the finances of over two million homeowners who may already be struggling with the soaring cost of living.
“With inflation currently sitting at almost five times the Bank of England’s 2% target, it’s clear that something needs to be done — but is this the way? The latest interest rate hike is being closely followed by a new, higher energy price cap, further compounding pressure just as we head into the cold winter months.
“People’s finances are being squeezed more than ever and the government, regulators, lenders and fintechs need to act quickly to protect people from being pushed to the edge as they risk missing repayments and potentially losing their homes.
“The three million homeowners whose deals may be coming to an end in the next two years can start preparing now by making sure their credit report is in a good place. Lenders will usually refer to this information to assess a customer’s ability to manage mortgage repayments, and the best deals are often reserved for those with the best scores.
“At TotallyMoney, we’re on a mission to help everyone move their finances forward. Our free app puts customers in control of their own data so they can track, manage, protect and improve their finances.”
Andrew Hagger, Personal Finance Expert, Moneycomms.co.uk said:
“The MPC decision to hike rates for the 7th time in a row since last December shows how severe the current inflation problem has become.”
“Mortgage borrowers approaching their fixed rate renewal are in for a massive shock when they see the eyewatering increase in their monthly repayments.”
“Facing hundreds of pounds extra in mortgage repayments on top of soaring food, fuel and energy costs means some borrowers will face a serious monthly budget deficit.”
* Moneycomms research commissioned by TotallyMoney
For more information, please contact the press team
TotallyMoney believes people’s financial data should work for them, and not against them and with more than four million customers, they provide the UK’s only free, live credit score and report.
Its service helps customers understand their financial position and provides personalised recommendations so they can start creating financial momentum. TotallyMoney also works closely with leading lenders, to ensure eligible customers are matched with the right products, underpinned by its robust data, product and tech capabilities.
TotallyMoney is regulated by the Financial Conduct Authority (FCA).