Forbes Advisor’s UK Editor and financial expert, Kevin Pratt, said following today’s announcement:
“Today we’ve seen another chunky rise in the Bank rate, and that can only mean bad news for mortgage holders. Lenders are likely to pass on the hike, and those on variable rate and tracker deals will probably see an increase in their repayments immediately, while those on fixed rate plans will likely be faced with more expensive loans when their term comes to an end and they need to find another deal.
“If you have £200,000 mortgage and are paying 5.5% at the moment, that equates to around £1,230 a month. But if your interest rate were to rise to 6%, your monthly bill would be £60 higher – that’s around £720 a year extra to find.
“If you had a £300,000 mortgage and saw your interest rate jump from 5.5% to 6.5%, your monthly bill would shoot up from around £1,840 to closer to £2,025 – that’s not far short of £200 a month more, or well over £2,000 a year.
“There is a crumb of comfort in today’s announcement. Anyone with an interest-bearing savings account should see an uptick in their income if their bank or building society passes on some or all of the increase. If it doesn’t, then it’s high time to think about moving to a more rewarding account.”
You can use this mortgage calculator to see exactly how this will impact your repayments.