UK households waking up to £240 overnight hike in mortgage bills

UK households have been warned housing costs are skyrocketing under the new Labour Party government. Moneyfacts reported that the average new five-year deal was 5.26% on Thursday – compared with 5.09% on the morning of the Autumn Statement and Budget on 30 October.

That means someone who took out a £200,000 five-year fixed mortgage on Thursday is paying £20 a month – or £240 a year – more than if they had signed up for an equivalent deal a few hours before Rachel Reeves set out her budget, which took place on October 30.

A mortgage is the name given to a loan that is used to buy a property or piece of land where the loan is secured against the property being purchased. Mortgages are typically long-term loans with repayments spread over 25 years, Moneyfacts has said.

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Ideally, you should aim to set your mortgage term for as short a period as possible, as that way you won’t pay as much interest – although it does mean higher monthly payments. Conversely, a longer-term mortgage will reduce the monthly payments, but means you pay more overall, as interest will be charged for a longer period, the group has also gone on to add.

It comes in the wake of energy bills looking set to soar in January, after the Ofgem price cap hike. Advice group and consumer championsa t Citizens Advice, which advises cash-strapped consumers, said the total energy debt owed by households to their suppliers is now £3.7 BILLION – and called for direct support from the Labour Party government.

“Without government action, millions are at risk of being left in the cold this winter and beyond,” said its head of energy policy, Alex Belsham-Harris, after the Autumn Statement and Budget from Ms Reeves, the Labour Party government's Chancellor.