The Bank of England has announced a rise in interest rates, increasing from 0.25% to 0.5%.
For householders on variable rate mortgages, this means higher interest payments. The Bank estimates that almost four million householders in the UK will be affected by the higher rates.
The majority of new mortgages are issued on a fixed interest rate basis for a specific period of usually 2-3 years, after which the Lender’s standard variable rate comes into effect for the remaining term of the mortgage. Householders who are within their fixed rate period will not instantly be affected by the increased rate.
Looking forward, it is expected that rates will increase again by 0.25% in 2018 and a further 0.25% in 2019, bringing the interest rate to 1%.
If you are unsure about how your mortgage re-payments will be affected, we recommend that you contact your Lender for further advice.