In recent months, the cost of our mortgages has skyrocketed - piling yet more pressure onto household finances.
The government has been in row-back mode after September's mini-budget spooked lenders, sending mortgage rates soaring to their highest level since 2008, as banks yanked mortgage offers from the market at a dizzying pace.
So, whether you’re a renter, a homeowner or a first time buyer - what do the rate rises mean for you? Adam Shaw investigates…
We meet Teresa based in Shropshire who is currently paying an interest only mortgage on a variable rate. Since losing her husband, she says her income has halved, and her mortgage payments have doubled. Teresa fears that falling behind on her mortgage payments could ultimately mean losing her family home where she lives with her daughter.
Sophie who lives with her partner in Gloucestershire, had planned to buy her first home this year - but those plans have been left in ruins. She’s worried that with current high interest rates, and possible further bank of england rate rises to come - her hopes of homeownership are now very far away.
According to data shared exclusively with the Tonight programme,
“The proportion of land owned by young people – aged under 35 – has halved over the past 25 years - from 15% in 1996 to 7% in 2019” - The Resolution Foundation
We meet Richard who lives in south London with his fiancee. He’s faced a recent rent hike on his flat and was told it was due to rising mortgage rates. He’ll now need to find an extra £200 a month to pay his rent.
“People are really going to feel the squeeze and it is going to push some people over the edge” - Martin Lewis CBE
For landlords who have taken mortgages as buy to let properties, the Bank of England's rate rises present a dilemma. Former contractor Tekin decided to invest in rental properties on the South coast to provide a pension when he retired.
He has 5 properties on interest only mortgages, but he says the monthly cost of those mortgages has surged dramatically. His profit margin has completely evaporated, but unlike some other landlords, he’s not prepared to increase his rents. Tekin believes that he will soon be paying more in mortgages than he receives in rent, leaving his pension plans in ruins.
Although the outlook has improved a little since the governments mini budget, many households are still set to face difficulties paying their mortgages in coming months.
We speak to Sarah Tucker, The Mortgage Mum who provides us with some top tips to help through the sometimes baffling world of mortgages.
We also meet Rory and Sebastian, two mortgage brokers who have seen a torrent of anxiety and anguish from clients in recent weeks.
“So…. we've had panic. We've had this crazy volatility over the last four or five, six weeks. What we now have hopefully is more stability. And we also have the signs that things are beginning to settle down.” - Rory Joseph, JLM Mortgages
There is hope that the situation is beginning to slowly improve and, according to our broker friends - there is already some room for optimism.
If you're having problems paying your mortgage head to Citizens Advice for support
If you’re struggling to meet your mortgage repayments, the government could be able to help, head to Money Helper to find out
Check out the Ultimate Mortgage Calculator from Money Saving Expert
Get in touch with The Mortgage Mum for more help and advice