The average interest rate charged by mortgage lenders has hit its highest level for 14 years, adding to the cost-of-living pressure.
So what can those struggling to make repayments do – and how must their mortgage provider help out?
WHAT ARE TRACKER, VARIABLE AND FIXED MORTGAGES?
There are different types of mortgages – all of which have been becoming more costly in recent months.
- Tracker rates rise and fall in line with the benchmark interest rate the Bank of England sets eight times a year
- Standard variable rates (SVR) change at the discretion of the lender – a decision influenced by the Bank of England’s rate but not directly linked
- Fixed rates, used by about three-quarters of mortgage customers, are set for a certain number of years – usually two or five – after which borrowers remortgage or are automatically moved to an SVR
![Chart on how mortgage rates have risen this year](https://ichef.bbci.co.uk/news/2048/cpsprodpb/323A/production/_127485821_fixed-rates-2nov-nc.png)
Mortgage rates have been rising, so the 1.6 million people on tracker or variable deals have been paying much more than a year ago.
The estimated 300,000 homeowners coming to the end of a fixed deal every three months are also facing a much higher monthly bill.
Typically, they could end up paying an extra £3,000 a year, the Bank of England said.
WHEN WILL MORTGAGE RATES FALL?
That is difficult to answer. Analysts expect Bank of England interest rates to peak at about 4.75% next year.
For anyone on tracker deals, at least, that means higher repayments to come.
Mortgage brokers say fixed-rate deals may have stopped going up for now – and may start to fall slightly as the year turns.
However, a decade or so of ultra-low mortgage rates – which many homeowners have become accustomed to – is clearly over.