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Taxes for average families up, benefits for the poorest down, while interest rate hikes are a few months away

October 30, 2021 9:49 AM

A housing estate under construction.

Mortgage borrowers face biggest rise in interest payments since financial crisis - the Office for Budget Responsibility has warned mortgage interest payments to surge by 13% in 2023, the biggest rise since the financial crisis: Average mortgage borrower to see monthly payments rise by £510 a year.

The Liberal Democrats leader is warning of "ticking mortgage timebomb" and says "it is now the worst time in a generation to be a homeowner."

Buried in the Office of Budgetary Responsibility's Budget documents is a stark forecast showing that mortgage interest payments are set to rise by 13% in 2023, reaching a peak of 14.8% in the second quarter of that year.

The unprecedented increase could see mortgage owners hit with eye-watering bills. Analysis by the Liberal Democrats shows that an average mortgage borrower on a standard variable rate of 3.26% will see their monthly mortgage payments go up by £42 a month, or £510 over a year. For a typical average mortgage borrower on a fixed rate mortgage of 2%, payments would go up by £25 a month or £300 a year.

The Liberal Democrats have warned the rise is the biggest threat to homeowners since the 2008 financial crisis - and could see families struggling to make ends meet with rising inflation, council tax hikes and mortgage costs all hitting at the same time.

Leader of the Liberal Democrats Ed Davey MP said: "This Conservative Chancellor has created the perfect storm. This is now the worst time in a generation to be a homeowner."British homeowners face the toxic cocktail of interest rate rises, house prices surges, and council tax hikes just around the corner."This ghastly forecast should send a shiver down the Chancellor's spine. The way he brushed off the cost of living crisis in the budget was careless and completely out of touch with the country. If he can't get a grip on this cost of living crisis, how on earth is he going to cope with a mortgage crisis?

"People who work hard and play by the rules deserve a fair deal. Enough is enough, it is time to scrap the tax hikes, solve this cost of living crisis and defuse this ticking mortgage timebomb."