A growing number of banks are withdrawing mortgage deals over fears the Bank of England will further raise interest rates to counter the plunging pound – increasing monthly repayments for the average family by as much as £800 by the middle of next year.
Lenders across the country, including Halifax, Virgin Money and Skipton, have taken the step after analysts warned the base rate could surge to 6 per cent next spring, after the UK’s Sterling plummeted in response to Chancellor Kwasi Kwarteng’s mini-Budget announcement last week.
Others to have pulled or amended deals include Clydesdale Bank, Scottish Building Society, Leek United Building Society, Nottingham Building Society, Bank of Ireland and Paragon Bank.
The surging costs could spell disaster for families who are already struggling with the cost-of-living crisis, while first time buyers face monthly repayments upwards of £1,100, a third more than they were paying in January, according to property portal RightMove.
Homeowners took to social media today to say they are ‘terrified’ of the rising interest rates, as one wrote on Twitter: ‘I think we may end up homeless.’
Another said he ‘laid awake at night’ worrying about how he would afford the hike in repayments, branding it ‘anxiety on steroids’, while a single mother pleaded for help, adding: ‘I am so scared.’
The base rate is currently at 2.25 per cent after the seventh consecutive increase last Thursday – up from a record-low of 0.1 per cent in December.
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