A small interest rate rise would add almost £1,000 a year to the average mortgage bill.
This is according to research from estate agency Savills, which found that a one per cent hike would cost buy-to-let landlords £2.4 billion extra in mortgage payments.
Meanwhile owner-occupiers would pay £7.8 billion more.
Around four in ten borrowers with variable rate mortgages would see their payments increase by a total of £4.3 billion immediately, with the remainder hit when their fixed-rate terms finished.
Economists expect the next hike in May. These expectations were reinforced earlier this week, when a senior Bank of England policymaker suggested that rates may be about to increase.
Deputy Governor Dave Ramsden told the Sunday Times: “I see the case for rates rising somewhat sooner rather than later.”
The pound rose on the news, driven in part because Ramsden was previously seen as an opponent of rate rises.
The number of buy-to-let mortgages has increased by almost 870,000 since the onset of the financial crisis.
But more borrowers overall are now making capital repayments as opposed to just interest-only mortgages – eight in ten today, compared with just half in 2007.
Read more about an interest rate rise for buy-to-let landlords.
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22 June 2020 • 9-minute read
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