First there were increases in food prices, then larger energy bills, and now homeowners are also facing increases in their mortgage payments.
The Bank of England’s interest rate now stands at an all-time low of 0.1% after it was cut to cap the rate in March last year. economic consequences of the pandemic. The base rate is a factor in many financial deals, including home loan payments, so if it goes up, mortgage rates go up. Mirror explained.
And now with experts predicting interest rates will rise inflationThe newspaper said the UK was heading for “the largest increase in mortgage costs since the 2008 property crash”.
add the cost
Estimated rate increases will be the first since July 2018 and are expected to start with a “modest” increase of 0.15 percentage points in December, with the base rate increasing to 0.25%. Times. The newspaper added that the impact on mortgage payers “will be softened or delayed as most homeowners and buyers are on flat rate deals.”
But in a blow to the already facing households”increased living costs”, experts said they expect a “sharp” 0.5 percentage point increase to 1.7 percent by the end of next year for the new two-year fixed-rate mortgage. Telegram. This would add £50 a month to the typical £200,000 mortgage payment cost.
In total, nearly two million UK households are on floating rate mortgages, which means “a change to the base rate will be implemented immediately”, The Mirror said.
While fixed-rate mortgages will remain unchanged for the duration of the deal, a rising floor rate will increase the cost of new fixed-rate mortgages and therefore “all homeowners will eventually face higher prices.”
‘There are amazing deals’
“For most consumers, the biggest cost of debt is mortgages,” said John Stepek. Money Week, “and in about 80% of cases this is fixed.”
But “if that’s not the case, you might at least consider shopping right now, given that there are still incredible deals,” he added.
IndependentVicky Shaw agreed that changing mortgage deals could be a good way to “save some money.”rising house bills”.
“A series of mortgage price wars means there are many low rates to choose from,” he said. Research by MoneySuperMarket last month revealed that the number of deals with rates below 1% has increased by 400% since June.
“Make sure you do your research – thoroughly – and carefully consider important financial decisions,” Shaw said.