Homeowners paying a typical mortgage can expect their fees to double next year, according to analysis from the Liberal Democrats.
The political party looked at figures published by the Office for Budget Responsibility (OBR) recently and determined that those who have £236,000 left to pay on their home loan will see their monthly payments rise from £236 to £474.
This would be the biggest increase in interest payments ever recorded, with homeowners paying an additional £2,851 a year for their property.
Spokesperson for the Liberal Democrat Treasury Sarah Olney stated: “The mortgage ticking timebomb has only seconds left. The coming months will see mortgage payments implode, leaving families paying hundreds of pounds more a month.”
The analysis concluded that mortgage interest payments will grow by 100.5 per cent in the 12 months leading to September 2023, which is significantly higher than the previous record of 63.6 per cent in 1989.
Ms Olney added: “This is simply unmanageable with the tax rises announced by the Chancellor.”
Interest rates have shot up so much, as the base rate has increased from 0.1 per cent last December to three per cent. This means those on tracker mortgages will have seen their mortgages increase in line with the base rate.
Fixed-rate mortgages could, therefore, be the preferable option for those who can update their loan or are buying a new property. However, many of these products come with interest rates of over six per cent currently, due to the lower risk.
For help choosing the right loan for you, contact our mortgage advisors in Liverpool today.