A recent hike in the mortgage rate interest is adding to the financial misery of the households which are grappling with the increasing cost of living in the UK. A report by the Institute for Social and Economic Research revealed the astonishing fact that 659,000 households are facing hard times due to financial difficulty in making mortgage payments. On the other hand, nearly 117,000 people are burdened with arrears.

If the Bank of England raises the existing mortgage interest rate by 1% or 1.5%, more 36,000 households would be struggling to meet their basic expenses. As per report, it is assumed that more 179,000 would be experiencing trouble to keep up with monthly mortgage repayments, in case rates return to their earlier level of 5%.

Private sector workers are bearing the brunt of rising mortgage interest rates more than public sector workers. The average private sector employees have been suffering a loss of 5% as pay cut in their monthly salary since recession hit the global economy in 2009. Employees in the finance and insurance sector have severely felt bottle-necked losing a monthly average amount of £101 from the take-home pay. Next to them are construction workers having suffered a loss of £99 a month.

However, the public sector employees who are proud homeowners and approaching their retirement age need not be troubled by the worries about their monthly expenses after retirement. If you are among the homeowners standing on the verge of retirement, contact us for equity release information.