Martin Lewis has warned homeowners they will have to pay more on their mortgages following an increase in interest rates.
On Thursday, the Bank of England put up interest rates from 2.25% to 3% - the biggest increase since 1989. For many homeowners, higher interest rates mean higher mortgage payments.
Consumer expert Martin Lewis took to Twitter to issue a word of warning and explained how mortgage holders could be affected. He acknowledged that many homeowners across the UK could now see their monthly mortgage repayments rise once again, which happened last in September after the mini-budget was announced by former Chancellor Kwasi Kwarteng.
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But it seems people on variable and tracker rate mortgages will be most affected at the moment, reports the Manchester Evening News. Martin tweeted: "Bank of England has increased base rates by 0.75% pts to 3%. - Variable/tracker rate mortgages will rise by roughly £40/mth (£480/yr) per £100,000 of mortgage - Existing fixes won't change, but when they end new deals will be far costlier."
He also warned people with a savings account to 'ditch and switch'. "Top paying easy access savings accounts will likely rise but it can take a month. Most big bank savings will continue to pay diddly squat, so ditch & switch. The jury's out on if top fixed savings will rise much or if this rise has already been baked in. Ill keep u updated," Martin said.
The Bank of England has also warned the UK could be facing the longest period of recession since reliable records began. If current market expectations prove correct, the economy could fall into eight consecutive quarters of negative growth. It would be the longest period of uninterrupted decline that the nation has experienced for around a century.
However, it would be a milder recession than in previous times. From its highest to lowest point, gross domestic product (GDP) is expected to drop 2.9%, a much smaller decrease than the 6.3% drop seen during the 2008 financial crisis.
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