With the Office for Budget Responsibility (OBR) predicting inflation as high as 5% next year, mortgage overpayment app Sprive has warned borrowers to shrink their mortgages now.
The OBR has forecast that in 2023, the interest component of mortgage repayments is expected to rise by 13% year-on year, a jump not seen since the housing crash in 2008.
Sprive has warned that Britain’s 11 million mortgage holders, owing more than £1.6 trillion, should not ignore the Bank of England’s (BoE) confirmation that it will be increasing the base rate in coming months to tackle rising inflation.
Further rate rises are expected to follow, with the OBR expecting the BoE to increase the base rate to 0.75 by the end of 2023.
As rates increase, Sprive warned that mortgage lenders are expected to raise variable rates.
Jinesh Vohra (pictured), founder and CEO of Sprive, said: “The interest savings from paying off your mortgage faster can be huge and being mortgage free is not just a fabulous feeling, it can change your life.
“But when we know mortgage interest rate rises are only months away, the argument for overpayments is even stronger, and more urgent.
“The Sprive app makes it quicker, easier and more flexible than ever before to take advantage of overpayments, adjusting the amounts in line with your circumstances – whether up, down or pausing for a while. And it is free.”