A quarter of borrowers would not be able to afford their mortgage if interest rates hit 5%

Interest rate rises and soaring bills are causing concern among borrowers worried whether they will be able to afford their mortgages. 

A quarter (25%) think it somewhat unlikely or very unlikely that they will be able to afford their payments were interest rates to hit 5%, according to the quarterly Anthony Ward Thomas Attitudes to Moving survey.

However one mitigating factor is existing mortgage holders are likely to have paid off more of their equity when they remortgage, meaning they would be able to get a low loan-to-value mortgage at a better rate than the equivalent high LTV rate.

Anthony Ward Thomas, founder of Anthony Ward Thomas removals, said: “The soaring cost of living is a growing concern. Interest rates are rising as the Bank tries to control runaway inflation and borrowers are clearly worried as to just how high they will have to go.

“Throw in higher energy, fuel and food bills on top of greater mortgage costs and it is no surprise that people are increasingly uneasy.”

More borrowers are attracted by the prospect of 50-year mortgages with longer terms to lower monthly payments.

More than a third (36.5%) of respondents interested in buying a new home said they were very or somewhat likely to opt for a 50-year mortgage if it improved their affordability.

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