Warning over mortgage ‘timebomb’ as homeowners ‘face biggest hike in interest payments ever’ 

Homeowners face the biggest hike in mortgage interest payments ever, it is claimed today, with thousands with a typical outstanding home loan seeing their monthly charges doubling next year to almost £500.

The shock rise was predicted after analysis of figures published by Treasury watchdog the Office for Budget Responsibility (OBR) and follows attempts by the Bank of England to tame soaring inflation by hiking interest rates – leading to rises in mortgage interest rates.

Homeowners face the biggest hike in mortgage interest payments ever, it is claimed today, with thousands with a typical outstanding home loan seeing their monthly charges doubling next year to almost £500. (File image)

The Liberal Democrats, who carried out the analysis, calculate that for a typical household with an outstanding mortgage of £236,000, the hike next year would mean monthly interest payments doubling to £474 – an extra £2,851 a year.

The news will fuel fresh fears that the cost of living crisis will lead to properties being repossessed.

Last night Lib Dem Treasury spokesman Sarah Olney said: ‘Homeowners are paying the price for the Conservative Government crashing the economy.

‘The mortgage ticking time bomb has only seconds left.

‘This is simply unmanageable with the tax rises announced by the Chancellor.’

The news will fuel fresh fears that the cost of living crisis will lead to properties being repossessed. (File image)

The party wants the Government to scrap a planned reduction on surcharge imposed on the banking sector, and use the money to set up an emergency mortgage protection fund to help families seeing their repayments soar. 

The OBR bases its figures on its forecast for the Bank of England base rate, which is currently predicted to peak at close to 5 per cent in 2023-24. 

Anyone currently on a variable or tracker mortgage, and those whose fixed rates are coming to an end, will be at risk of the higher charges. 

As many as 1.8m homeowners will come to the end of their fixed-rate deals in 2023, it is thought.