MARTIN Lewis has issued a warning to home buyers after interest rates are predicted to soar to 6% next year.
The consumer champion was answering questions about the housing market on Good Morning Britain (GMB) earlier today.
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And the Money Saving Expert website founder suggested first-time buyers shouldn't buy a house now - unless they are fully prepared.
He said: "If you've got a decent deposit, and you've found a house that you love, and you've got a mortgage that is affordable for you, and you're going to stay in that property for a long time, get on with it, buy your house.
"If you're doing this because 'this isn't the house that I want, but I feel I should do it before everything goes wrong and it all goes belly up', don't buy your house."
The consumer champion went on to explain that it's hard to predict what will happen with the housing market at the minute because there are "so many variables and it's incredibly complex right now."
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He said: "There are no firm right answers and I apologise if you play this back in two years time and I'm totally wrong. That's possible."
It comes as hundreds of mortgage deals were pulled from the market last week over uncertainty at where interest rates are heading.
The current Bank of England base interest rate sits at 2.25%, after it was increased in September.
But that could hit 6% next year, experts have warned.
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That rate affects how much banks charge for borrowing including mortgages, loans and credit cards.
With rates expected to go up, lenders pulled their deals as they were unsure how to price them.
House prices could be hit as higher borrowing rates are expected to make it harder for people to buy a home.
Economists warned that house prices could fall as much as 15% if interest rates do hit 6%.
Martin said: "We are in the period for the first time I can remember in recent times where the majority of commentators are talking about a correction, in other words prices coming down on houses.
"So there is a risk by buying now you're locking yourself into a high mortgage on a high house price.
"And, of course, most first-time buyers don't have much deposit, so it's a big loan-to-value and the house prices may well come down and you may regret it later."
Because mortgage rates are rising, buyers face higher monthly repayments than when rates were lower.
A mortgage broker can help you work out the best mortgage deal for your circ*mstances and what you can afford to borrow.
The government slashed stamp duty in the mini Budget to help home buyers.
First-time buyers stand to save up to £6,250 and those already on the property ladder up to £2,500 compared to the previous rates.
Rising mortgage costs
Martin criticised the Treasury's claims that the saving could be higher when taking into account what has happened to mortgage rates.
A Treasury post on Twitter said that a typical first-time buyer in London moving into a representative terraced house will save £11,250 on stamp duty.
But Mr Lewis, interviewing chief secretary to the Treasury Chris Philp on the programme, said: "Now, on my calculations, to save £11,250 on stamp duty you have to be buying a house as a first-time buyer of £500,000 or more.
"The cheapest fixed-rate mortgage on a £500,000 property with a 10% deposit leaves you with payments of £2,400 a month, which is £28,000 a year.
"But your example is for somebody who earns £30,000 a year. Clearly, they would not get that mortgage. And clearly on £30,000 a year before tax you cannot pay a mortgage of £28,000 a year.
He added that it was "fundamentally irresponsible for the Treasury to be putting out this kind of statement in the middle of a cost-of-living crisis."
Mr Philp speculated that they were likely illustrating "the income tax saving of someone on approximately medium earnings".
He said: "You are right to point out that someone on that particular level of earnings would be unlikely to be able to get a mortgage to fund a £500,000 house, unless, of course, they were doing so with a partner, but I suspect that's why they did it."
You can figure out how much you might save on stamp duty by using our calculator.
How can you get the best deal on your mortgage?
If you're set on the idea of re-mortgaging or looking to buy your first home now, there are some tips you can use to help.
Greg Cunnington, from mortgage broker LDN Finance, previously told The Sun shopping around was one way to get the best deal.
Different lenders have different lending criteria so some might let you borrow more than others.
So if you know what's out there, it will help you to make the best-informed decision.
If you don't want to shop around, you can always use a mortgage broker.
A mortgage broker is a person or company that acts as the middle person between the buyer and the mortgage lender.
Mortgage brokers have become more popular in recent years as the housing market becomes more competitive.
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If you're willing to, you can fix your mortgage for longer as well.
Some lenders let you borrow more if you fix for a longer period, and with rates predicted to reach around 6% next year, fixing now could save you money in the coming years.
