Mortgage repayments could become a serious strain for vulnerable households in the aftermath of the quarter-point rise in the interest rate announced by the Bank of England this week, Citizens Advice has warned.
Although the widely anticipated rate rise surprised few commentators, "it only takes a very small change in people's circumstances to tip them from manageable credit commitments into serious debt", Citizens Advice social policy officer Peter Tutton warned.
Repossession warnings are on the up, with housing debt rising by 20 per cent in the last 12 months, he added.
Earlier this week, moneysupermartket.com found that just 12 per cent of people were prepared for any upward revision in the mortgage repayments they had to make.
Nevertheless, the Council of Mortgage Lenders remained sanguine about the affordability implications of the rate hike, which director general Michael Coogan called "a certainty even before it happened".
"There is every prospect that inflation will be brought back under control more quickly than the pessimists expect," Mr Coogan forecast.
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