Interest rate increase: June
The Bank of England base interest rate is being increased for the fifth time. With the base rate now rising to 1.25% we are seeing the Bank of England try and tackle inflation more aggressively. With rates previously standing at 1%, this increase is in line with previous ones, however, it’s the first time that rates have been increased for the fifth time in a row. Of course, this means higher monthly payments on many mortgages just as the cost of living crisis hits. So we’ll go over what these changes will be and what they will mean for homeowners’ mortgages.
How does this affect your mortgage?
Now for many mortgage holders, this rate change will not affect how much monthly interest they pay. This is because a majority of mortgage holders are on a fixed-rate mortgage. Due to this, their monthly payments are fixed at the start of the mortgage for a certain period of time.
If you are on a “discount”, standard variable rate (SVR) mortgage, or a tracker mortgage then your monthly mortgage payments will be increasing in line with the announced changes. While the average increase has not been calculated yet, last month’s interest rate increase led to a £12.61 increase in monthly payments per £100,000 on the mortgage. You can check out the last update here.
If you are looking to get more information on how these mortgage changes affect you buying or selling a property, or you wish to be referred to a mortgage advisor, please get in touch with us here.