Martin Lewis has warned that anyone with a mortgage could face a "huge shock" when it comes to their repayments next year as he met with bank bosses to push for relief for households.
The MoneySavingExpert founder attended a Mortgage Summit with lenders and the Financial Conduct Authority (FCA) in Downing Street on Wednesday, after expressing "great concern" over what would happen to mortgages in the spring to chancellor Jeremy Hunt. Ahead of the meeting, Martin addressed listeners on the latest episode of The Martin Lewis Podcast to explain what is set to happen for anyone with a mortgage.
Martin explained that mortgage holders will face a "huge payment shock" if their current mortgage is set to end in the coming months, as they are likely to be moved onto "far, far higher rates" next year. Mortgage rates are expected to peak in the spring of 2023, Martin explained, when it's thought that interest rates will be at their highest.
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"I have a long list of well researched suggestions and we will see what we can do," Martin said as he prepared for the summit to discuss possible relief measures for mortgage holders. "I’m not promising revolution, but I hope for some minor iterative change that might make things easier for people."
Following the Downing Street meeting, Martin took to Twitter to share some insight into the discussions. Describing it as a "decent meet on putting best practice flexibility & forbearance measures in place for spring" he said that lenders and the FCA "seemed open to suggestions".
While Martin said that he wasn't allowed to discuss much about the meeting, he did share three suggestions he had put forward in order to provide "temporary relief" to mortgage holders in the spring. These were communicating with the public to "ensure people know the pros and cons of all options", reversibility to allow people to return to their prior mortgage rate "if and when things improve", and limiting the impact of credit scores temporarily.
The FCA also issued advice following the summit on the support available for mortgage holders amid rising interest rates. They explained that there are options available from lenders for anyone who may be struggling to afford their mortgage repayments, including extending the term of the mortgage - although this will increase the amount you have to pay back overall - or moving to an interest-only mortgage, though if you do this temporarily your monthly payments will be higher when you switch back to repaying your mortgage.
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