The combined challenges of rising inflation and increased interest rates have been making financial forecasting and cost-cutting even more essential for Cumbrian businesses in recent months.  

At the same time, the county’s mortgage advisers have been busy trying to help worried people facing rising costs combined with increased monthly repayments.  

In many cases, they say, they have not been able to deliver very good news.  

The Bank of England raised interest rates to 5.25 per cent in early August - a 15-year high - as it looked to cool inflation. 

However, rising interest rates - up from below one per cent at the end of 2021 - have seen mortgage rates increase dramatically.  

The result is that those who are coming to the end of fixed rate mortgages are facing a sudden increase in payments.  

For mortgage advisers like Ewa Brzeska, at Truly Independent, based in Carlisle, it has led to a wealth of enquiries from people trying to budget for the future. 

"There's quite a lot of people who want reassurance more than anything, even if it's just to check in on what their payments will be going forward given the current rates," says Ewa. "There's certainly a lot more enquiries. They started after the mini budget and it's just been ongoing ever since." 

Those who are feeling the pain the most are borrowers who took on a mortgage while rates were extremely low and are now facing a hike in monthly payments as they remortgage. 

Ewa says the people who tend to feel this even more acutely are those who may have started families at the same time or increased their overheads in other ways. 

"This is where people are really, really struggling because affordability rules are a lot tighter now as well, so the only option really is to stay with an existing lender,” she says. 

“I speak to a variety of different people in different circumstances. Some of them are panicking. Some of them don't know where to go or what to do.” 

Ewa says despite the pain being experienced by those who are remortgaging, now may actually be a good time for first-time buyers to get on the property ladder. 

"If they can comfortably afford to get a mortgage right now, then I do feel like it might put them in a slightly stronger position because they will already be used to the higher rate," she says.  

"Hopefully they will see a fall when the initial deal expires. We can never guarantee that but they do know for sure that they can afford the mortgage at the higher rate. 

"The best advice I can give people who are remortgaging is, first of all, figure out what the new monthly payments will be. 

"Even if they're not due to remortgage for six months just having a little bit of a look at your current rates and doing a mortgage calculator online can give you a bit of an idea as to what to expect going forward. 

"Can you make any amendments to the existing household budget to account for that higher payment? For those that have zero disposable income and cannot make any cutbacks I encourage them to get in touch with their lender sooner rather than later.” 

Ewa says as part of the government’s Mortgage Charter - announced in July - certain lenders have agreed to support borrowers who are having difficulty and may be able to help. 

"Ultimately, I would encourage people just to seek that independent mortgage advice so we can actually review the circumstances because each person's circumstances are different,” says Ewa.  

“I personally don’t think interest rates will go down. I think they’ll probably level out at the current level. The base rate is expected to go up, so for tracker mortgages they may even increase a little and maintain it until inflation hits that two per cent target. 

“Do not count on interest rates falling. Just prepare yourself for higher payments and if they do fall then that’s a bonus.” 

In Cumbria:

Phillip Bovis, managing director at Lakes Mortgages, in Sandside, says some borrowers are facing monthly payment increases of up to £1,000 a month.  

In other cases they are extending the length of their mortgage term to spread the payments out. 

“I’ve been working in the sector for nearly 30 years and I would say the general mood today is that people are depressed because there’s such a big jump,” he says.  

"From a market point of view we see this as a short-term thing due to inflation hopefully coming down and the Bank of England being under pressure to reduce rates, but it's certainly a tough time at the moment. Often the news that we have to give our clients is not good.” 

Phil says that borrowers need to remember that they can begin arranging and fixing a rate for remortgaging six months before their current arrangement ends. 

“That’s a win-win situation because if rates get better you can usually change it,” he says.  

“If they don’t then you have got the rate secured. 

“That’s when you need to start seeking advice and it’s the earliest opportunity that you can do anything.” 

He says there may be some light at the end of the tunnel. 

"We predict that in the next six to eight months rates will go up again, over half a per cent to 5.75 per cent,” he says.  

“Hopefully that's when we will see it hit the top of the hill and start coming down. 

“For now, cutting your cloth accordingly is the best advice. People may have to lose a holiday a year or maybe have one car instead of two. It’s tough but something has to give.” 

David Corrie, managing director at Corrie and Co estate agents, based in Barrow, says the higher rates have led to a slowdown in the market.  

“We are seeing evidence where people are borrowing less and being more circumspect about how much they're going to borrow and that perhaps actually translates into them shopping for a house at a lower price,” he says. 

"Next year, we should see interest rates coming down, albeit at a slower rate than they've gone up, as inflation eases. 

"So the advice would be that if you don't have to change at the moment then don't because you might be locking into a rate that could be historically high.” 

David says the expectation for interest rates to level off or drop means it is a less alarming situation than it was previously.  

"I think when we couldn't see the ceiling on the increase in interest rates they were worrying times," says David.  

"I don't see anything now suggesting it's going to go up much more than 5.5 per cent.”