Do you have a mortgage? If so, you’re not alone. According to the government’s English Housing Survey, almost a third of households in the UK have a mortgage.
Recently, there have been some interest rate changes, which could have a big impact on your monthly mortgage repayments. The Bank of England says that up to four million households will face higher monthly mortgage bills this year.
If you have a tracker or variable-rate mortgage, you will likely see an immediate increase in your monthly payments if interest rates go up. For example, if the Bank rate were to go up from 3.5% to 4%, someone with a typical tracker mortgage would need to pay £49 more each month. And if you have a standard variable rate mortgage, you need to pay £31 more.
Most customers have a fixed-rate mortgage, so their monthly payments may not change immediately. However, house buyers and those looking to remortgage, estimated to be around 1.8 million people this year, will have to pay more for their mortgages than they would have a year or more ago.
Since September’s mini-budget, there have been many changes in the mortgage market, and the average two-year fixed deal has gone from 2.29% in November 2021 to 5.44% today. This means that typical borrowers will need to pay hundreds of pounds more each month in repayments.
