Homeowners to be pushed into severe debt when interest rates rise, says think tank | Debt Advice Foundation

Homeowners to be pushed into severe debt when interest rates rise, says think tank

New research from the Resolution Foundation suggests that at least a million British families, and possibly as many as two million, could be spending more than half their disposable income on mortgage and credit repayments by 2018. 

The current number of people with that much of their income committed to repayments is likely to double to 1.1 million when, as is forecast, interest rates start to rise.

New research from the Resolution Foundation suggests that at least a million British families, and possibly as many as two million, could be spending more than half their disposable income on mortgage and credit repayments by 2018. 

The current number of people with that much of their income committed to repayments is likely to double to 1.1 million when, as is forecast, interest rates start to rise.

This is the second in a series of reports from The Resolution Foundation looking at debt levels in the UK.  The figures have been calculated using the latest five-year growth projections from the Office for Budget Responsibility.

If the base rate rises to three per cent – as has been predicted – it found that the number of people using more than half their disposable income to repay debt could rise from 600,000 to 1.1m by 2018.

If interest rates rise as high as five per cent, the number of people in “debt peril” could more than triple to 2million.

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To read the full report, click here

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