Mortgage holders across the country are facing increased pressures amid the cost of living crisis after interest rates have now hit a new 15-year high. As the Bank of England decided to raise interest rates by 0.5 percent on Thursday (June 22), this has now put the base rate up to five percent - which is bad news for homeowners.
Those who are coming to the end of their fixed-rate deal, or who have a variable rate mortgage, are now being hit incredibly hard by higher interest rates which have a direct affect on their monthly mortgage repayments.
According to online comparison site Money Expert, around 700,000 fixed-rate mortgages are coming to an end in the second half of 2023, with many homeowners coming off a deal that was significantly cheaper after buying their house when rates were much lower.
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Leanne Kearey, 33, is just one of hundreds of thousands of homeowners whose mortgage repayments have become unaffordable due to increased rates.
After buying her semi-detached house in Chadderton, Oldham in 2019, the mum-of-one, who lives with her husband and young daughter, has now seen her mortgage repayments go up by a whopping £480 per month.
As her fixed term ended, Leanne was forced to look around and secure a new two-year fixed deal - which has hiked her monthly payments up from £1,120 to £1,600 a month.
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"We were mortified when we found out, it's horrific - how are people meant to live? With gas and electricity rates rising constantly too, and the cost of living at an all time high. Something's got to give," Leanne told the Manchester Evening News.
"We’re fortunate that we both have good jobs and a stable income, however this has definitely left us in a difficult position. We now have to find an extra £500 a month just to retain our home. It feels like we’re paying so much more, and for what?
"This is something we’re having to accept as a lifestyle change now too, the option to expand our family further is currently off the table, we couldn’t afford the cost of the mortgage on any maternity pay, and nursery fees.
"We’re lucky to have what we have, but it’s not without sacrifice. It’s devastating to see, and I know others are really struggling financially, it feels like things are only going to get worse."
Leanne says that she and her husband initially planned to remortgage with a better loan to value after undergoing an extension, but they have now discovered that they will be no better off.
"We’re currently undergoing an extension and the plan was to remortgage with a better LTV once the extension was complete, but having consulted with our mortgage advisor we have learnt that even with a better LTV, the increasing rates meant that we weren’t any better off," Leanne said.
"With our house currently being a building site, we’re not in any position to sell, either.
"Looking at the rates over recent history, there is definitely huge potential for a further increase, and I’m not sure how we will keep affording our home if this continues unless our salaries increase or we win the lottery.
"We now have a two-year fixed, and we are starting to think that we maybe should have gone for longer just to secure our future, even at such a horribly high cost."
Asked what help she'd like to see from the government amid the mortgage crisis, Leanne said: "“I’ve lost all faith in our government, I don’t believe there’s anything they will do to help people like us in this situation.
"Resolving issues such as rising gas and electricity prices would be a starting point, with only a few months until winter and the costs of rising gas and electricity on-top of extortionate mortgage rates, as a country we’ll be in a real crisis.
"If the government could help in other areas that lessens the strain on the most important outgoing (a roof over our heads) that would be something. But sadly I don’t believe they’ll do anything to ease these hard times."
On Friday, Chancellor Jeremy Hunt revealed he had reached an agreement with banks and lenders to assist mortgage holders grappling with high interest rates, but declined to provide government support.
Following a meeting with banks and building societies at Downing Street, Mr Hunt stated that they had agreed to implement a number of new mortgage rules.
These include a minimum 12-month period before repossessing homes. Furthermore, he announced that lenders had agreed to allow struggling borrowers to extend their mortgage terms or temporarily switch to an interest-only plan with "no questions asked".
Nonetheless, homeowners across the country remain anxious.
Disabled single mum Abigail Tunstall, 49, says she's now considering selling her home and moving into a motorhome after the inflation hike.
The former NHS nurse bought her three-bed home in Cornwall for £180,000 in 2004. After moving away from a fixed-rate deal in 2018, she was able to afford the £360 a month mortgage.
But since January 2022, it has now increased several times, first by 55 percent to £560, and then today (June 22) she found out it is due to increase again.
On Thursday she received a text from mortgage provider Barclays to say the base rate on her tracker mortgage will increase from 4.5 percent to percent.
Abigail is yet to find out exactly what her new monthly payments will cost, but she reckons it will be nearer 6 percent.
Abigail, who has been unable to work full-time since 2013 due to several physical disabilities, said: "My financial life has imploded. Food is through the roof, and everything else is going up in price.
"People have been clinging on by their fingertips but people will start losing their homes the way things are going.There's a queue for social housing as long as your arm here, so there's nowhere else to go.
"It's terrifying, I'm not using food banks yet but it's getting there. The second half of the month is impossible because there's literally no money left.
"I have been looking at RVs now because I can't see any other options aside from becoming homeless."
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