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Homeowners feel the pinch after rate rises

Over three million homeowners are struggling financially because of recent rises in their mortgage repayments, says Purely Mortgages.

The broker suggests borrowers struggling with repayments should consider changing from standard variable rates to fixed rates.

Purely Mortgages says the impact of another quarter-point rate rise on an average 25-year repayment mortgage of £109,000 would be around £210 a year.

Its research shows that out of three million homeowners who admit to facing financial difficulties, half are on a standard variable rate.

Another 1.4 million people say as little as £20 extra on their repayments would cause difficulties while four million say a £40 increase would give cause for concern.

The research, carried out by YouGov earlier this month, found that two million homeowners are considering selling up if rates rise again.

It concludes that despite rates remaining steady this month, the cumulative effect of five rate rises this year had led to many homeowners reassessing their financial positions.

The research shows that older homeowners have been hit worst by the rate rises. Of the three million people currently struggling, around half are over 50.

Purely Mortgages chief executive Mark Chilton says: “We may yet get another interest rate rise this year. Although interest rates are still historically low, it does not take much for people to feel the pinch, especially older people and those on lower incomes.”


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