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Mortgage ‘ticking timebomb’ I warned of has exploded, says Martin Lewis

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Summary

Consumer champion Martin Lewis has warned that the mortgage ‘ticking timebomb’ he spoke of last year has now ‘exploded’, as data shows average two-year fixed rate rises to 6.07% and five-year to 5.72%. Lewis argued that banks needed to make it easier for people to change terms, take a payment holiday or switch to interest-only but that they have not done so, leading to a rise in mortgage rates and making it more difficult for would-be first-time buyers to access mortgages. This has resulted in tenants spending a record proportion of their disposable income on rent, and average rents for new lets have also risen, jumping 10.4% in a year.

Q&As

What did Martin Lewis warn the UK government about last year?
Martin Lewis warned the UK government about a mortgage "ticking timebomb" last year.

What did Martin Lewis argue banks should make easier for people?
Martin Lewis argued that banks should make it easier for people to change the length of their mortgage term, take a payment holiday or switch to interest-only.

What has been the effect of increasing interest rates on renters?
Increasing interest rates has had a big "knock-on effect" for many renters, who are spending a record proportion of their disposable income on rent.

How many mortgage products are available for borrowers with small deposits?
There are 199 products available for borrowers with small deposits.

How much of their income do UK tenants typically spend on rent?
UK tenants typically spend more than 28% of their pay before tax on rent.

AI Comments

👍 Martin Lewis is doing an excellent job of warning and informing the public about the dangers of the rising mortgage rates. It's great to see him speaking out about the need for more government help and protection.

👎 The government's lack of action to protect homeowners from the rising mortgage rates is unacceptable. It's time for them to step in and provide more assistance to those struggling with their mortgages.

AI Discussion

Me: It's about the mortgage crisis that Martin Lewis warned about last year. He said that he doesn't think the government will bring in a mortgage rescue package, even if it wanted to. He also said that the rise in interest rates has squeezed people on mortgages.

Friend: That's really worrying. It seems like the situation is getting worse and there's not much people can do about it.

Me: Yeah, it's definitely a concerning situation. It's also impacting renters, since the average UK tenant now spends more than 28% of their pay before tax on rent. And the number of mortgage products for first-time buyers has decreased significantly.

Friend: That's really worrying. It seems like the government needs to step in and do something to help people who are struggling with their mortgages.

Action items

Research the current mortgage rates and compare them to the rates from a year ago.
Reach out to a financial advisor to discuss the best options for managing your mortgage in the current market.
Consider refinancing your mortgage to take advantage of lower interest rates.

Technical terms

Mortgage rates: The interest rate charged on a mortgage loan.
Two-year fixed rate: A type of mortgage loan with an interest rate that is fixed for two years.
Five-year fixed rate: A type of mortgage loan with an interest rate that is fixed for five years.
Loan-to-value: The ratio of a loan amount to the value of the property it is used to purchase.
Disposable income: The amount of money left over after taxes and other deductions have been taken out of a person's income.
Rent: Money paid for the use of a property.
First-time buyers: People who are buying a home for the first time.