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They urge anyone who will be struggling to pay increased home loans to seek financial help. But worried homeowners fear “a bloodbath” of repossessions is on the way. Banks and building societies pulled 40 percent of all mortgage products from the market last week as the pound dropped to a record low and the Bank of England raised interest rates to 2.25 percent.
Insiders have also predicted rates will rise over the next 12 months in a bid to combat inflation – and could even reach 5.5 percent.
It means those on variable mortgages and those with fixed rate deals coming to an end face massive rises in their repayments.
It came after the Chancellor Kwasi Kwarteng’s tax-cutting mini-Budget led to instability in the financial markets.
It is thought that around two million people are on standard variable or tracker rates, while 300,000 come to the end of their fixed rates every three months.
And the energy price guarantee, which came into effect yesterday, has put an additional strain on household finances.
Homeowner Nicholas Wilson, from Hastings, East Sussex, is one of the many facing losing their home after struggling to afford mortgage payments.The 65-year- old, who is awaiting a diagnosis for suspected cancer, said that his repayment amount has almost doubled since February.
He added it is “impossible to even contemplate” the stress of losing his home and warned of the mental health impact on mortgage holders.
“There’s going to be suicides, as for some people that will be the only way out,” he said.
“I’m not threatening to myself but the thought of packing up my things to sell my house is just horrible.”
Mr Wilson added: “There are going to be so many repossessions, it will be a bloodbath.
But SarahTucker, founder and managing director of The Mortgage Mum, said: “People really need to try not to panic – fear spreads so quickly.We are all going to have to cut back and make choices.
“The positive is we are in this together so can help one another. It is uncertain how things are going to go.
“This is serious and you should not put your head in the sand. If you think you might need help there are options and you have to tackle it head-on.”
And Sarah Coles, a personal finance analyst from Hargreaves and Lansdowne, added: “Definitely don’t panic. Mortgage brokers are across all of this and are there to help you.”
- Mental health support can be found by calling the Samaritans free on 116 123, or email [email protected], or visit Samaritans.org
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