‘The mortgage crisis has changed our lives’: borrowers in England reel from latest rise in rates

theguardian.com:

L iam, 36, a senior IT manager and married father-of-one from Newcastle upon Tyne, is one of millions of homeowners whose mortgage payments will rise even higher after the Bank of England on Thursday put up the base interest rate to 5% – a 15-year high.

Together with his husband, Liam bought his four-bedroom house in 2019 for £269k, and the couple’s three-year mortgage deal, refixed at 1.64% in 2020 just before the first lockdown, expired in March.

“The fixed rates on offer were obscenely high and this meant a tracker mortgage [one that moves up or down in line with the base rate] was the best solution for us, because we hoped the interest rates would start coming down. It didn’t work out,” Liam says.

The couple’s monthly repayments have increased by 50% since they took out the mortgage, from £800 to £1,200. At the same time their energy tariff went up in price and so did their nursery fees.

“It’s a perfect storm,” says Liam. “I looked at fixed deals yesterday and they had gone up again. I don’t want to fix at 6 or 7%, and feel slightly despondent.”

Should the Bank’s rate climb to 6%, as the financial markets are anticipating, the couple may have to turn to family for help.

“That’s a real worry – we would have to find a lot of extra money,” Liam says. “The value of our house has gone down. I’m blaming Liz Truss entirely for this.”

While the Bank’s 13th consecutive interest-rate rise is affecting people across the country and with various kinds of mortgage arrangements, it has dealt a particularly harsh blow to young families in the capital and wider south who have very large outstanding mortgages.

Homeowner Laura, 34, from London,has recently remortgaged before her two-year fixed rate deal with an interest rate of 1.87% ends in