Sky's Gurpreet Narwan explains why the mortgage shock is only set to intensify and how the government's hands are tied if it is serious about bringing inflation down.
The cost of a two-year fixed rate mortgage has climbed above 6% while the equivalent rate on a five-year fixed rate mortgage has reached 5.67% but the headline figures belie the pain that households really face.At 13%, mortgage rates were much higher than they are now, but the size of the loans households were taking out relative to their incomes was also smaller.That's going to come as a shock to the 2.
Homeowners re-fixing in 2024 will have to find an extra £2,900 a year, on average, according to the Resolution Foundation.Average mortgage rate rises above 6% Renters are unlikely to experience much respite because landlords will most likely try to pass on the extra costs to tenants.In the five years from the end of 2021 to the end of 2026, homeowners will have paid an extra £15.8bn towards their mortgages, compared to the end of 2021.
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