More than 300,000 borrowers have been pushed into poverty as a result of higher mortgage rates in the past two years.
Thousands of households remortgaging since 2022 have experienced sharp falls in their disposable income as interest rates continued to raise housing costs.
A report from the Institute for Fiscal Studies, the economic think tank, estimates that the rapid increase in mortgage rates over 2022 and 2023 led to 320,000 people falling into poverty.
The IFS said: "rising mortgage rates have played and are likely to continue to play an important role in many households’ living standards”.
The IFS report also stated that the average mortgage rate for the 2022/23 period was around 2.3%, which equals interest payments of £240 per month for a household with a typical outstanding mortgage. But, a tenth of household were facing a doubled interest rate of 4.7%.
Sam Ray-Chaudhuri, an economist at the IFS said that the report is "understanding" the impact of higher mortgage rates because they are not properly measured in the official income data. Instead, the data is based on an average rate.
Adults remortgaging in 2022 were two percentage points more likely to fall behind on bills than those who had not remortgaged. The IFS are expecting the problem to get worse for homeowners.
The levels of absolute poverty had remained unchanged between the 2019 and 2023, despite the pandemic and the cost of living crisis. However, the report found a sharp increase in direct measures of hardship.
4.6 million working-adults were unable to heat their homes in this four-year period, a rise from 1.8 million.
Mr Ray-Chaudhuri said: “At a time when rates of deprivation and food insecurity have risen substantially, poverty statistics that hide the real scale of these increases risk policymakers missing what is truly happening to poverty.”
Peter Matejic, chief analyst at the Joseph Rowntree Foundation, which sponsored the IFS report, also said: “This report raises many questions about whether social security is adequate for the challenges looming over struggling households.”
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