Interest rates unchanged as yet, but two in five concerned
A survey carried out between the 4th and 21st July 2014 has found that two in five mortgage holders in Britain (41%) are concerned about the impact of a rise in interest rates on their mortgage payments in the next 12 months.
This figure rises to 57% for those with a variable rate mortgage, 53% among those living in the South East and 48% among those living in the South West.
Interviewing was undertaken before the Monetary Policy Committee’s latest decision on interest rates and predictions of an increase in the number of household’s in ‘debt peril’.
Just under six in ten, 57%, of those with a fixed rate mortgage say they are not concerned about the impact of rises, compared to 51% who say this overall.
When asked about the threshold for finding it difficult to afford mortgage payments, a third of those with a mortgage (33%) cited a rise in their monthly payment by up to £100 as the tipping point. Just over one in ten (13%) said they would find it difficult to afford their monthly mortgage repayments if the amount was up to £50 higher, but this figure rises to 30% for those living in the North West.
Expenditure on holidays and leisure/going out are most frequently cited as outgoings that mortgage holders would cut back on if their mortgage payment was £100 higher (37% would cut back on holidays, and 38% would cut back on leisure/going out).
A third of mortgage holders (30%) felt that they would have to reduce spending on everyday essential items such as food, energy, clothing and insurance if their mortgage payment was £100 higher. This rises to 39% for Londoners and those living in Wales.
Other findings include:
- More likely than overall (41%) to be concerned about a rise in interest rates impacting their mortgage payments are females (45%), those aged 35-44 (50%) and those with children in the household (48%)
- Nearly one half of mortgage holders (49%) say they would find it difficult to afford their monthly mortgage payments if they went up by up to £150 (compared to 33% who say an increase of up to £100 would be the tipping point into difficulty, and 13% who say this for an increase of up to £50).
- One in ten respondents (11%) would cut back on food/groceries if their monthly mortgage payment was £100 higher, and this rises to a quarter (24%) of those living in Wales.
- Londoners are more likely than overall to say they would cut back on everyday essential items such as food, energy, clothing and insurance if their monthly mortgage payment was £100 higher. 39% of Londoners would cut back on these items compared with 30% overall/nationally.
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Technical note
Ipsos interviewed 1,090 British adults aged 16+ face-to-face, between 4-21 July 2014. Data have been weighted to the known profile of mortgage holders.
