PM claims Brexit could see your mortgage become £1,500 a year more expensive
The Prime Minister has claimed that mortgages could cost up to £1,500 more a year if Britain were to leave the European Union.
David Cameron says that a vote for Brexit on 23 June would create “clear and present danger of higher mortgage rates” which would add hundreds of pounds each year to repayments. Members of the 'Vote Leave' campaign have called the PM's claims 'bogus'.
Brexit could add over £1,000 to mortgage payments
David Cameron has been accused of scaremongering after claiming that a vote to leave the EU would see homeowners pay more on their mortgages.
The claim came from a new Treasury document that says Brexit would cost Britain the equivalent of £4,300 for every home. The document said that mortgage rates would rose by 0.7% in the most likely Brexit scenario, or 1.1% if Britain fails to win a trade deal and has to use World Trade Organisation rules.
The Daily Mirror reports that “Remain campaigners crunched the figures and said that would raise a 1.5% interest rate mortgage to 2.2% in the most likely case, or 2.6% in a severe shock”.
A 0.7% rise would add £920 to the annual cost of an average mortgage (£810 for first-time buyers) and a 1.1% rise after a severe shock would add £1,470 per year (£1,280 for first-time buyers).
David Cameron said: "Nearly all experts agree there will be instant shocks to the economy if we leave the EU and there is a clear and present danger of higher mortgage rates."
Tory Chancellor George Osborne added: "If we quit the EU the country would be poorer, there would be volatility in the financial markets and that would push up mortgage costs irrespective of what the Bank of England might do with official interest rates.
"You don’t help people onto the housing ladder by crashing the economy."
Jayne-Anne Gadhia, chief executive of Virgin Money, said: "Even if the base rate stays flat after a vote to leave the EU, mortgage prices could rise considerably - leading to more expensive monthly mortgage payments for everyone."
While many experts have predicted the mortgages will become more expensive if Britain leaves the EU, Brexit campaigners Boris Johnson, Michael Gove and Gisela Stuart have called the Treasury analysis “indefensible” and “bogus”.
"If we stay, we are tying ourselves to a broken Eurozone economy while simultaneously accepting unlimited migration of people trying to escape that broken economy," they wrote. "British taxpayers are already paying nearly £2bn for Albania, Macedonia, Montenegro, Serbia and Turkey to join the EU. The European Commission recently announced an acceleration of these plans and is already extending visa-free travel to the border with Syria and Iraq.
"This is dangerous. The government's claim that Britain has a veto is meaningless if it is simultaneously trying to 'accelerate' this process."