Three million middle class homeowners are at risk of having their savings wiped out by the recent surge in mortgage costs, a leading think-tank has warned.
Analysis from the Institute for Fiscal Studies (IFS) suggests 2.9 middle middle income mortgage holders would have to raid their savings or ask for help to meet an unexpected expense of around £2,000.
The amount cited by the IFS is also almost the same as the annual jump in payments of £1,920 facing borrowers remortgaging today compared with rates offered at the start of May.
It suggests that millions of households will struggle financially when they come to renew their deals, leaving them to raid their savings, borrow on a credit card, take out a personal loan, or ask friends and family to help.
The worrying forecast came as Nationwide raised rates on its fixed rate mortgages for the third time in three weeks, as lenders scramble to keep up with rising wholesale borrowing costs.
Banks are rapidly repricing their deals as market borrowing rates move sharply higher.
Higher-than-expected inflation and wage data has prompted City economists to rip up their forecasts for interest rates and predict a much higher peak. The Bank of England is now expected to take rates to 5.75pc, with 6pc a possibility.
Source: uk.finance.yahoo.com/news/three-million-homeowners-risk-spending-050000666.html
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