Rishi Sunak warns homeowners could face £1k a year increase on mortgage payments

dailyrecord.co.uk:

Homeowners on certain mortgage plans could have to fork out an extra £1,000 a year if the base rate continues to rise, Chancellor Rishi Sunak has warned.

The Tory MP warned the cabinet against borrowing more to fund public spending, with interest rates expected to go up by 2.5% over the next year.

He added that if homeowners are not on a fix-rate deal, they could have their mortgage payments increase by more than £1,000 a year, the Mirror reports.

Sunak forewarned of a series of interest rate rises, which could amount to 2.5% and cautioned against borrowing so as not to stoke inflation further.He said that a one percentage point rise on a standard mortgage equated to £700.When the base rate – the interest rate benchmark set by the Bank of England – rises, those who are not in a fixed deal could see their payments rise overnight.Those who are on lender revert rates or Standard Variable Rates (SVRs) and tracker rate mortgages are most likely to see the rate passed on in full.A fixed rate mortgage could provide a safe haven against the rise as it locks you in a deal for a set term - but you'll have to act fast as the advertised rates on these products tend to go up as soon as the base rate does.Sunak is under pressure from Tory MPs and some cabinet ministers to do more to help people with the cost of living.The Chancellor is understood to be planning a major intervention in his autumn budget, before the energy price cap rises further.Mr Sunak has previously said it would be "silly" to intervene now.Forecasts suggest that energy bills could rise by as much as 40 per cent in October to nearly £3,000 a year.He said: "It would be silly to do that now, or last month, or the month before, when we don't know exactly what the