Martin Lewis warns of ‘huge payment shock’ coming for mortgage holders

The money-saving expert Martin Lewis has become a national hero in 2022, helping millions of Britons to navigate a seemingly ever-worsening cost of living crisis with thoughtful financial advice at a time when many are in need of all the practical help they can get.

Bringing compassion and expertise to his appearances on his ITV programme The Martin Lewis Money Show Live, via his BBC podcast, his website and newsletter and through his regular media interviews, Mr Lewis is providing a welcome public service to those struggling to make ends meet.

No concern is too small to warrant his attention and, in the latest episode of The Martin Lewis Podcast, the financial guru sounded the alarm over a “huge payment shock” set to come crashing down on homeowners next spring when interest rates peak and mortgage borrowers come off their previous fixed terms.

“Those who already have mortgages are going to face a huge payment shock when their current mortgages end and they’re moved onto far higher rates,” he told his audience.

“That’s likely to peak in the spring, when it’s thought, and nobody truly knows, interest rates will be at their high.

“We all know interest rates go up and mortgage costs go up. There are a huge number of people whose fixes will be ending next year, and whose fixes are ending right now and they will all be seeing huge rises."

Mr Lewis went on to reveal that he had personally met with the chancellor last month to discuss the problem.

“I had a meeting with Jeremy Hunt a few days before the Autumn Statement,” he continued.

“In there, I talked about my great concern for the spring and the huge payment shock many people will face when their current mortgage deals come to an end and they have to move onto a new one.

“I suggested we need to look at measures of forbearance and flexibility in order that we are able to make sure people get over that hump.

“Now this is not about manipulating the housing market, it’s not about any great huge changes.”

He said he plans to meet again with Mr Hunt and bank bosses to hammer out possible solutions, for instance introducing mortgage payment holidays, shifting to interest-only terms, stripping away bureaucracy and scrapping stress tests at 7 per cent that prevent people borrowing at 4 per cent and mean they often find themselves stranded on 6 per cent instead.

“I have a long list of well-researched suggestions and we will see what we can do,” Mr Lewis said of the follow-up summit.

“I’m not promising revolution but I hope for some minor iterative change that might make things easier for people.

“Lenders don’t want people in arrears or defaulting. That’s expensive for them and they don’t make money. They do have a vested interest in making it easier.

“It’s not quite bashing heads together, it’s more getting everybody in the room to smooth out some of the humps in the process so as to allow people to smooth out their finances.”