Despite over half of homeowners admitting that they are concerned that the cost of their mortgage will rise should the Bank of England opt to increase the base rate further, a majority say that they are prepared should this happen.
New research by specialist property lending experts, Octane Capital, commissioned a survey of over 1,000 homeowners with a mortgage and found that 18% weren’t familiar with how the base rate may impact the monthly cost of their mortgage, with a further 37% only being somewhat familiar.
59% of those surveyed stated that they had already seen the cost of their mortgage increase over the last 18 months since the first interest rate hike was implemented in December 2021.
For 21%, this caused increased financial stress and anxiety, with 6% forced to reconsider or delay plans to improve their home.
No surprise then, that 56% of those surveyed stated they were either very (23%) or somewhat (33%) concerned about the potential of a future increase in the cost of their mortgage ahead of Thursday’s base rate decision by the Bank of England.
When asked about the biggest challenges a mortgage cost increase would pose, 37% stated it would be the financial strain on other areas of life such as bills and expenses, while for 31% the ability to afford their monthly mortgage payment was also a worry.
The good news is that 78% of those surveyed do feel as though they are prepared to deal with an increase in the monthly cost of their mortgage.
However, 61% would like to see more help offered to homeowners from the government or financial institutions when it comes to dealing with the increased cost of borrowing.
CEO of Octane Capital, Jonathan Samuels, commented: “All eyes will be on the Bank of England again this week and homeowners and buyers across the nation will be hoping it's not a case of unlucky number 13 when it comes to a potential increase to interest rates.
"For those who face the potential of higher monthly mortgage repayments, it’s understandably a worry and many existing homeowners have already seen their household finances stretched over the last 18 months due to increasing mortgage rates.
"The silver lining is that the majority have been planning for such an eventuality and are well placed to handle an increase in their monthly payment costs.”