IF Liz Truss becomes prime minister, homeowners in the UK could face a steep rise in their mortgage payments, Rishi Sunak has claimed.
To prove this, the former chancellor released an interactive calculator which he says will show how much your mortgage monthly payments will rise under Truss.
The website reads: "Liz Truss's economic adviser, Patrick Minford, has recently told the Times that expensive mortgages were 'part of the adjustment'.
"He said: 'Hopefully out of this we’ll get to a more healthy economy with interest running at 3, 5, 7 per cent.'
READ MORE: What rise in interest rates mean for first-time buyers - and your mortgage payments
"So we've done the maths for you to calculate exactly how much a rise to 5% could end up costing you and your family."
According to the calculator, a person who has £100,000 left to pay back on their mortgage would have to cough up an extra £3250 a year.
This would amount to another £270 per month on top of their existing mortgage payments.
For someone buying a home at the average UK house price of £281,000, they would face a having to pay a whopping £9132 extra a year, according to Sunak.
This amounts to more than £700 more per month.
The website, promoted by Lord Smith of Hindhead on behalf of Sunak, reads: "These estimates are based on the example of an interest-only floating-rate mortgage, assuming no capital repayments during the year, and further assumes that the applicable rate increases pari passu with the Bank of England base rate.
"This tool is provided for illustrative purposes only and does not constitute financial advice."
The calculator can be found here.
It comes after an ally of Sunak suggested that Truss’s “dangerous” tax cut plans risk stoking inflation, as the Tory leadership contenders traded blows ahead of the next television debate.
Conservative MP Mel Stride, who chairs the Commons Treasury Committee, warned that large-scale unfunded tax cuts could make the problem “very significantly worse” and insisted a “measured” approach is required.
But Tory former chancellor Sajid Javid defended Truss’s plans and said they would not necessarily fuel inflation or ramp up borrowing.
Foreign Secretary Truss has pledged to “start cutting taxes from day one” with a new budget and spending review that would reverse April’s rise in national insurance and next year’s corporation tax hike from 19% to 25%.
In contrast, Sunak has pitched himself as the fiscally conservative candidate who will “deliver tax cuts that drive growth” in a “responsible” way.
The former chancellor has claimed his rival to become the next prime minister would further drive up interest rates, raising mortgage payments, with her plans.
But Truss countered by saying “we cannot tax our way to growth” and insisting her plans would not drive up prices further.
The exchanges came before the Bank of England raised interest rates to the highest level in nearly three decades on Thursday, from 1.25% to 1.75%.
The Bank’s forecasters also warned that Consumer Prices Index (CPI) inflation will hit 13.3% in October, the highest for more than 42 years, if regulator Ofgem increases the price cap on energy bills to around £3450.
Truss and Sunak are expected to be challenged further on their approaches when they take part in a Sky News debate from 8pm on Thursday.
Stride, chair of the Commons Treasury Committee, told BBC Radio 4’s Today programme: “What we must do now is avoid stoking the inflation and making the problem even worse.
READ MORE: UK economy to fall into recession, predicts Bank of England as interest rates hiked
“One of the ways you can make the problem very significantly worse is by coming forward with large-scale, tens of billions of pounds’ worth, of unfunded tax cuts.”
He added: “The big decision, fiscally, here is around tax. You have to do it in a measured way and at the right time but not start coming forward with tens of billions of unfunded tax cuts right now.
“I think that would be really quite dangerous.”
He also insisted Sunak would “absolutely not” concede despite polls suggesting he is a long way behind Truss.
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