Variable rate mortgage repayments are set to double if the interest rates hit 5%; potentially affecting the two a half million UK households on a variable rate mortgage, NIESR has warned.
On average, the monthly repayment on a typical variable rate will rise from around £500 to over £1,000.
This could see around 30,000 households face monthly mortgage repayments greater than their monthly incomes.
Max Mosley, NIESR economist, said: “We now have evidence of what is potentially on the horizon for millions of households.
“Those most vulnerable to mortgage rate rises could see their real incomes decimated if interest rates surpass 5%.
“This shock to mortgage repayments, in combination with a decade of stagnant real incomes, the impact of Covid-19, inflation and a cost-of-living crisis, presents an unprecedented assault on the country’s living standards.”
