Commons Sense

House of Commons · Ministers' Questions

Household Income: Mortgage Interest Rates

Tuesday 19 December 2023 · 2 questions

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Answered 0 Partly answered 1 Not answered 0

Key points

  • Rachel Hopkins asked about the potential impact of changes in mortgage interest rates on household income.
  • The Minister emphasized the importance of low inflation for lower interest rates and mentioned the Government's support for the Bank of England.
  • The Minister noted that mortgage costs and interest rates have increased globally, putting financial strain on many households.

Topics (select to filter)

Questions & Answers

Q1 Rachel Hopkins Lab Luton South and South Bedfordshire
Economy
Context

The question arises from concern over rising mortgage costs and the potential impact on families' financial stability as many fixed-rate deals expire next year, leading to higher payments.

Question

What recent assessment has been made of the potential impact of changes in mortgage interest rates over the course of this Parliament on household income?

Answer from Bim Afolami

As the hon. Lady knows, the path to lower interest rates is through low inflation, and the independent Bank of England has the Government's full support as it takes action to return inflation to target. The Government's mortgage charter, brokered by my right hon. Friend the Chancellor earlier in the year, is available to 90% of borrowers. Real disposable income per person is about £800 higher than the Office for Budget Responsibility predicted in its March forecast.

Partly answered

Not addressed: The response did not provide a specific assessment of how changes in mortgage interest rates will impact household income over the course of this Parliament.

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Q2 Rachel Hopkins Lab Luton South and South Bedfordshire
Economy Housing Mental Health
Context

Many are suffering from financial hardship and personal debt due to the expiry of fixed-rate mortgages next year, leading to higher monthly payments.

Question

The expiry of 1.5 million fixed-rate mortgage deals next year will mean even more people paying sky high-costs. It comes at a time when many are suffering increased financial hardship and personal debt, which is having an impact on their mental and physical health. Does the Minister think it fair that families are paying hundreds of pounds more each month to cover the costs of the Government's mini-Budget disaster?

Answer from Bim Afolami

Mortgage costs and interest rates have gone up throughout the world, and we are in more or less the middle of the pack—they are higher in the United States, for example—but what will definitely make things harder for the hon. Lady's constituents, and indeed all our constituents, is borrowing an extra £28 billion that will only serve to increase inflation and keep rates higher for longer.

Not addressed: The Minister did not address whether it is fair for families to pay more due to the mini-Budget disaster but instead discussed global trends and government borrowing practices.

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