MORTGAGE rate rises are like “rolling financial thunder” that will cost hard-pressed families hundreds of pounds a month, according to Labour’s shadow chief secretary to the Treasury.
Pat McFadden was commenting after it was revealed this morning that the average five-year fixed-rate mortgage stood at 6.01%, while the average two-year rate has hit 6.47%.
He told GB News: “It’s very concerning and it’s like rolling financial thunder this. The rates are going up and up particularly over the past month or so.
“And every month there are about 200,000 more people coming off a two or a five-year fixed rate. It might have been fixed in the past at something like 2%. And I know coming on to the kind of rates that you’ve just quoted is going to cost families hundreds of pounds a month when they renew these deals.
“It’s really going to squeeze their spending in other areas. And it’s not just mortgage holders. It’s also renters too, because they’re renting from people whose mortgages are also going up. So this is evidence of our really tough squeeze on both mortgage holders and renters throughout the country.”
In a discussion during Breakfast with Eamonn Holmes and Isabel Webster, he continued: “The best way to tackle it in the long term is with proper financial stability. That’s what we’ve said will be at the core of our economic programme.
“We saw what happened when you have financial instability with the disastrous Tory mini budget last September that really put rocket fuel under mortgage rates.
“And in the short term, we came out before the government did actually last week, saying that banks have got to show forbearance to people who are in trouble, have got to give them options like going on to interest only payments, or extending the term of the loan.
“We’ve got to do everything we can in the short term, to make sure that people don’t lose their homes because the people with mortgages haven’t done anything wrong. They’ve worked hard to own their own home, and now they find themselves getting hit with these huge increases.”
He added: “If there’s a theme today, it’s that maybe that regulators are waking up to some of the practices that have been taking place for a while and that is spreading across several stories.
“It’s also been a feature of what’s happened in the water industry over the years where companies have been loaded up with debt and yet big dividend payments have been paid out rather than as much of the debt as possible going to investment in the modernisation of the service, which is what should have happened.”
