Rishi Sunak warns homeowners their mortgage payments are ‘set to rise by £1,000 a year’

Rishi Sunak has warned homeowners that their mortgage payments are soon set to ‘rise by £1,000 a year’.

The Chancellor is said to have told cabinet ministers that interest rates will rise by 2.5% in the coming months, meaning people without fixed rate mortgages will be faced with higher repayments.

According to The Times, he rejected calls to provide more help for families struggling with soaring bills by arguing that borrowing risked stoking inflation and interests rates.

In an interview with Mumsnet this week, Sunak said: “I’m really conscious that, I don’t want mortgage rates to have to go up any more than they’re already going up.

“If governments, at a time like this, borrow lots and lots more money, and we’re already borrowing quite a lot, our own interest bill is ticking up, what that does is risks interest rates having to go up even more.”

He added: “That will just add to pressure for people with mortgage payments to make.”

Read More: Inflation rises to highest level in 30 years due to soaring energy, fuel and food costs

In the same interview, Sunak said it would be ‘silly’ to provide more support to families when asked whether more support would come by someone who is disabled and relies on life-saving equipment at home.

At this, Sunak responded: “Now I know people are anxious about this and wondering if they are going to go up even more, and I have always been clear from the beginning we will see what happens.

“And depending on what happens to bills then, of course, if we need to act and provide support for people, we will.

“But it would be silly to do that now or last month or the month before when we don’t know exactly what the situation in the autumn will be. So I’d say we’ll see where we are with that if we need to do more.”

During the twenty-five-minute interview, he was also asked whether he would consider introducing a windfall tax on energy companies that have profited from the rise in global prices, something he said he would ‘look at’.

The government has faced criticism for its response to the cost of living crisis, which includes a £150 council tax rebate and a £200 energy bill discount, which will then have to be paid back over five annual £40 payments.