November 2022
Featured in this insight: Financial services
82% of homeowners are expecting to cut their spending if mortgage payments increase in next 12 months: A survey by YouGov has revealed insight into how people are expecting to deal with increases to mortgage repayments as a result of soaring interest rates.
The survey is a new 'RealTime' survey which polled a nationally representative sample of 1,162 adults in October 2022. It also revealed that 45% believe they will have to make large cuts to household spending if their mortgage payments shoot up, with just 12% saying this wouldn’t impact them and they could continue spending as they are currently. Almost two in five (37%) said they will have to make small cuts to their household expenditure if mortgage payments increase in the next year.
Furthermore, 63% of homeowners polled said they would consider switching the mortgage deal they are on if mortgage costs were to increase, with just over a fifth saying they would stay with their current deal (22%).
However, when looking at people whose fixed-rate mortgage deal is nearing expiration (a year or less left), almost three-quarters said they would change mortgage deals (73%); compared with 42% of those on a variable rate.
Looking at the type of deal mortgage switchers are favouring this time, the survey found that 73% are choosing a fixed rate with just 4% opting for a variable. Five-year fixed rates are also being selected by half those switching, with 42% going for a deal that is less than five years, and 12% seeking a ten year or more deal.
Looking at remortgage options if facing a steep rate rise, 16% of homeowners said they would consider putting their home up for sale.
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