Family panic as rising interest rates could wipe out their savings: ‘being held hostage’

Interest rates: Martin Lewis on affect on mortgage applicants

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The social researcher, 43, and her husband Paul, 42, live with their children Ines, six, and Louis, eight, in Faversham, Kent.

They currently pay £1,718 a month for a 28-year mortgage on a four-bedroom new-build bought for £485,000 in 2020.

Her three-year 2.08 per cent fixed deal will expire next year – and, with cheaper deals already vanishing from the mortgage market, the Josephs know they are facing higher monthly payments.

Mrs Joseph said: “I can’t sleep at night for worrying about how I’ll pay the mortgage.

“The repayments are likely to rise to more than half my take-home pay – or even more if interest rates go through the roof.

“I could leave my current deal and lock into a new seven-year one now that I can afford, but my current lenders are demanding £12,000 for me to switch.

“It’s like I’m being held hostage, because that would wipe out our savings overnight. It feels like I’m facing down the barrel of a gun.”

She added: “I think it’s unscrupulous of banks to hold customers to these fees – anyone who took out a mortgage two or three years ago had no inkling of what was about to happen.

“Now we’re all going to be bankrupted, unless we’re prepared to pay out the price of a house deposit again.

“I realise am lucky. I have a small amount of savings and a well-paid job that allows me to pay an exit fee, even if we clean ourselves out by doing it – many thousands of families don’t have that luxury.

“Yet there’s no mechanism that would force banks to at least reduce these charges or cap the amount people should have to pay in order to save their skins.”

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