Around a third (33%) of mortgage holders believe the interest rate hikes over the past year have made their mortgage repayments unaffordable, according to a new study.

Research by Butterfield Mortgages revealed that the figure rises among younger mortgage customers between the ages of 18 and 34, to 48%.

Since December 2021, the Bank of England (BoE) has made six consecutive increases to interest rates, with the base rate rising from 0.1% to 1.75% in the past nine months. The Monetary Policy Committee at the BoE is to make another announcement on interest rates this Thursday and is again expected to raise the base rate, with some economists predicting this could be by as much as 0.75 percentage points to 2.5%.

Butterfield Mortgages’ research, which surveyed 2,000 UK adults, showed that rising interest rates top many mortgage customers’ financial concerns. It found that 44% said they are more worried about rates than inflation while a similar number (42%) said they are considering switching to a different mortgage provider offering a longer fixed-term mortgage.

Furthermore, the findings indicated that the majority of UK mortgage customers (53%) feel locked in with their current mortgage provider, while more than a quarter (27%) are actively shopping around for a new mortgage.

“Borrowers are facing sharp shifts in the economic landscape,” said CEO of Butterfield Mortgages, Alpa Bhakta.

“Our research has shown the extent to which six consecutive interest rate hikes by the BoE have impacted mortgage repayments and people’s wider financial concerns.

“As lenders, we must do everything we can to help mortgage customers navigate the best possible financial path through these mounting challenges. This includes taking proactive steps towards anticipating borrowers’ evolving needs and offering greater flexibility with long-term and fixed rates, which may provide a sense of security over the potentially uncertain times ahead.”

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