Money Saving Expert Martin Lewis has explained how mortgages will be affected after the Bank of England raised the base interest rate to 4.5%.
The financial guru says monthly mortgage payments will rise, leaving many homeowners worse off. However, depending on which mortgage plan people are on, some may not yet feel the brunt of the rate increases.
Writing on Twitter, Martin said: "Bank of England base rate up 0.25% pts to 4.5% (12th consecutive rise, highest level since 2008). Variable/tracker rate repayment mortgages will rise c.£12/mth (£150/yr) per £100,000 of mortgage (use mortgage calc to check)."
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He said that those on fixed rates will not see their monthly payments change, reports the Manchester Evening News. Martin added: "Existing fixes won't change. New cheap fixed rates've already baked rises in and in fact are lower than cheap tracker rates likely indicating markets think future rates will be lower.
"Top paying easy access savings accounts will likely rise a tiny bit over the next few weeks (though competition between providers is the biggest driver of change right now). Most big bank savings will continue to pay diddly squat, so check, ditch & switch. Unlikely to see top fixed savings rise much, as like with mortgages, this news was well-flagged & thus prob factored in."
Those on fixed mortgage rates will not see an increase in their payments until they renew their plan. If you're concerned about how your mortgage will change, you can use a mortgage calculator here.
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