A report from the Institute for Fiscal Studies (IFS) has predicted that an extra 320,000 people have been pushed into poverty as they moved onto more expensive deals, as a result of the rise in mortgage rates in the last two years as reported by The Guardian.
The rise in mortgage rates saw the average rate for a two-year fixed mortgage jump from 2.34 per cent in December 2021 to over six per cent by December 2023 as reported by The Times. This resulted in a significant increase in monthly payments, with a £200,000 mortgage seeing a rise of £412 per month, from £881 to £1,293.
Official statistics report 230,000 people falling into poverty due to increased mortgage bills, but the IFS suggests this number is understated. The think tank also predicts that 370,000 more homeowners could fall into arrears as they refinance from cheaper deals says The Daily Telegraph.
