The Bank of England has raised the interest rate to 0.75% – the highest level since March 2009 – in a move that will create shockwaves for millions of homeowners, while satisfying a portion of savers.
For only the second time in a decade, the rate has risen – this time from 0.25% to half a centile higher. The move will increase the interest costs of more than three-and-a-half million residential mortgages that have variable or tracker rates.
Across the UK, 9.1 million households have a mortgage, which means more than a third of mortgage holders will see their interest costs rise – in some cases significantly. For example, in a £150,000 variable mortgage, a rise to 0.75% is likely to translate into an increase of as much as £224 annually.
‘More than a third of mortgage holders will see their interest costs rise – in some cases significantly.’
What does the interest rate rise mean for homeowners like you?
Now is a great time to explore your options, no matter what kind of mortgage you currently hold. Why not opt for a mortgage review with one of our specialist advisers? We can help you explore the mortgage deals available to you, to help you save more money.
Interest rates may continue to rise over the coming years until the Bank of England feel they have achieved rate normalisation. But before they rise again, you can lock in an interest rate that will last up to 10 years, giving you peace of mind that your mortgage will be affordable in the future.
Your home may be repossessed if you do not keep up repayments on your mortgage.
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