Mortgage base rate increase (0.75%)
In the middle of March, the Bank of England announced that it would be increasing the base interest rate for the third time in four months. This is the first time that interest rates have been raised by the Bank of England for the third time in a row. With interest rates now standing at 0.75% here is an update on how it can affect your mortgage.
How does this affect your mortgage?
Depending on what type of mortgage you have you might not be immediately affected by the base rate increase. This is because according to UK finance the most common type of mortgage in the UK is a fixed-rate mortgage. If you are part of the 74% of mortgage holders that have this contract, then the monthly rate for your mortgage will not go up until the end of your fixed term. It may be possible to go on to another fixed-term mortgage to secure a new deal.
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 increase in monthly payments per £100,000 on the mortgage. You can check out last month’s 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.