A quarter of homeowners won’t be able to afford their mortgage if rates rise again

A quarter (26%) of homeowners say they wouldn’t be able to afford their mortgage if rates go up again, Moneyhub research shows.

What is more, a further third (35%) said they were concerned their mortgage would be unaffordable when they next remortgage.

The Bank of England has raised the base rate 13 consecutive times to 5%, bringing average rates across the big six lenders to 5.24%.

The next base rate decision is on August 3.

Suzanne Homewood, managing director, decisioning at Moneyhub, said: “Times are challenging for homeowners.

“Mortgage rates continue to rise to levels not seen since before the financial crisis and other essential costs are eroding financial buffers, leading to a complex situation and increased risk for both consumers and lenders.

“It’s clear that there needs to be more support for those remortgaging or on tracker or variable rates who will be feeling the impact of rising monthly payments.”

Schroders expect the base rate to peak at 6.5% by the end of the year, as the Bank continues its quest to lower inflation.