TSB has surveyed thousands of homeowners across the country to fully understand how prepared Britain is for a rate rise and what can be done to support them.
The bank has today released a report which reveals the nation’s concerns about the impact a rate rise will have on their mortgage payments.
TSB’s report, Getting Britain #ReadyForRateRise, has found that 72% of homeowners are likely to see their mortgage payments increase if the base rate rises, with 20% having “no idea” how even a small change could have an impact on their monthly mortgage repayments. This is a worrying situation as 56% say they are already struggling with household bills.
Ian Ramsden, director of mortgages at TSB, said: “The statistics included in TSB’s report are fairly shocking and clearly there’s a lot of work to be done to help Britain’s homeowners understand how they can accommodate a rate rise. But there is no need to panic; a little bit of planning now can make a big difference in the future.
“Our report includes practical hints and tips to help people get to grips with the potential base rate changes that could occur over the next few months.
“We don’t know when the Bank of England will change the base rate, but we do know preparing early and helping homeowners understand their options is the first step in helping Britain get #ReadyForRateRise.”
TSB recommends homeowners speak to their lender early, draw up a monthly budget and get any existing debt under control.
TSB’s research also looked at how people would react to a base rate increase and found that many would need to make some big changes to meet any increased monthly mortgage repayments:
- 74% would budget and make spending cutbacks.
- 43% would try to switch to a cheaper loan / mortgage.
- 33% would prioritise debt repayments and pay the most important ones first.
- 14% would seek help from debt advice organisations.
- 12% would try to borrow from friends or relatives.
- 9% would check their social security entitlements.
Reducing their supermarket shopping bill is top of the list for 69% of people closely followed by eating out less (62%), limiting non-essential spending (62%) and taking cheaper holidays or not going away at all (61%). 30% would work overtime or take on an additional job, closely followed by 28% who would turn the heating down to save on energy bills.