Both of these options would cost borrowers more in the long term but take off the pressure in the short term.
“Lenders will have processes in place to support borrowers who are struggling”, said David Hollingworth of L&C Mortgages. “Mortgage lenders have to consider how to help people in financial difficulties through measures like restructuring payments, providing payment deferrals and removing additional fees and charges” said David Mendes da Costa, principal policy manager at Citizens Advice, in a recent blog post.
“These are not normal times and so the FCA should be looking for lenders to go above and beyond to make sure that borrowers are protected from the shift to higher mortgage rates.”, leaving many homebuyers, already burdened with the surge in the cost of living, struggling to keep up with payments. The base rate increasing by 0.5 percentage points is adding to the pressure for homeowners. Around four million will see mortgage payments increase by up to £3,000 a year next year, the Bank of England said yesterday in its latest Financial Stability Report.