The Liberal Democrats have warned of the true cost of mortgage rate rises within the Office for Budget Responsibility’s (OBR) Autumn Statement documents.
The OBR forecast total household servicing costs would rise from £73bn in 2023 to a staggering £151bn in 2026.
With mortgages the most common source of household debt, the findings showed the impact of consecutive Bank of England interest rate rises.
The £151bn cost of servicing debts in 2026 was higher than the peak of 2008, when it was £98.3bn.
Analysis by the Liberal Democrats revealed the typical household would soon be spending £5,350 per year to service their debts, including mortgages.
This equated to £230 more a month in debt costs, compared with the £40 savings in National Insurance contributions following the Chancellor’s Autumn Statement.
Separate figures from the OBR also revealed that families would pay more than double in mortgage interest by the end of 2024 compared to 2022.
The Liberal Democrats called the figures “a horror show,” and said that Brits would be hit hardest by mortgage rate rises in the years to come with millions of fixed rate mortgage deals coming to an end.
Liberal Democrat treasury spokesperson Sarah Olney MP said: “This is a horror show for Brits. There is no end in sight to the mortgage nightmare faced by millions.
“Not only have household finances been clobbered by a barrage of tax rises, but now they face household debts not seen since the financial crisis.
“This is the true cost of the Conservative government crashing the economy with their botched budget.
“The Liz Truss hangover continues to cripple the British economy and people’s wallets.
“The blunt truth is that any tax cut before the election will be more than cancelled out by the mortgage bombshell.”
