Air has warned that a potential pause in Bank of England (BoE) base rate cuts would compound the risk of mortgage shocks for older borrowers and the need for advisers to consider all options.

The later life lending platform’s warning comes as more economic analysts are forecasting the base rate, currently at 4%, may now not be reduced any further before the end of the year.

This comes amid worries about inflation with the result that older borrowers remortgaging from fixed rate deals will face much higher monthly repayments.

According to BoE estimates, borrowers remortgaging this year on average face an increase in annual costs of £1,752 – around £146 a month – due to the end of historically low fixed rate deals. The average five-year rate in 2020 was around 2.4%.

Air said that older borrowers could be particularly vulnerable as they may struggle to be accepted for the most competitive fixed rate deals, due to changes in circumstances such as giving up full-time work.

CEO of Air, Will Hale, said: “Even moving to a new fixed rate can see monthly costs increase significantly for many customers and that applies even more if older borrowers are moving to standard variable rates.

“Many older customers will be particularly at risk as their circumstances may have changed since they last remortgaged. It is vital that all customers over the age of 55 do not default to a new product with their existing lender but instead talk to an adviser who can consider all their options.

“If they have a comprehensive conversation with an adviser they can be recommended a product that is appropriate for an individual’s specific needs, wants and circumstances. Advisers who do not include all later life lending products within their scope of advice should still have a wide field of vision to ensure that products such as modern lifetime mortgages are still considered even when affordability on mainstream products can be met.”

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