Around 20 million people aged over 20 in Britain have an outstanding mortgage, that's 1/3rd of adults in the UK and half of 30-50 year olds.
And with the Bank of England interest rates going up to 5% today, to combat the (to them) surprising continued inflation these 20M people are going to paying an average of £280 a month more on their mortgages to cover the increased cost of borrowing.
This is according to some recent analysis from the Institute of Fiscal Studies.
The amount of increase in payments varies somewhat by age, and it hits the youngest harder than the oldest because younger people generally have larger mortgages than older people...
This is REALLY going to hit the middle classes with larger mortgages, hard! I mean, and there are case-studies all over the UK news media today of people who are going to have find an extra £500 a month, an extra £800 a month, some people an extra £1000 or more a month when they come off their low fixed-rate deals in the next few months...
I did some basic math... I personally pay around £650 a month on £37K outstanding, and that's at 2%, and my mortgage is set to come an end by August 2028, only five years to go.
Once that goes up to 5% then I could simply keep my monthly payments the same, when I formally remortgage in September and I'd only have to carry on payments for an extra 6 months, to December, which doesn't sound like too much of a stretch....
Alternatively I could up my payments by around £30 a month that would cover the difference.
Basically I'm fine as long as I can fix below 7% I'm not too affected, it's not a disaster.
I ran the math for a hypothetical £120 000 mortgage (not unheard of, there you're talking about finding an extra few hundred squid a month, which is a bit more of a pain in the ass.
I mean cheap borrowing for private people was never going to carry on forever, especially not with god awful economic mismanagement of the Tories - this is how it always works out, the ordinary people who were mug enough to fall for high debt pay the price in the end!
