What does the interest rate rise mean for me?
The Bank of England has raised its bank rate today to 0.75 per cent and we’re here to cut through the jargon and answer, what does this mean for you and your mortgage?
I’m on a fixed rate mortgage
Generally speaking, if you’re on a fixed rate mortgage, you won’t see a difference in your payments.
For those of you who still have a while left on your fixed rate mortgage i.e. 3 or 4 years, you won’t notice any difference in your payments now. However, if you’re close to the end of your term, please bear in mind that when your term ends, you’ll fall onto the lender’s variable rate which could result in a rise in your payments.
I’m on a tracker mortgage
If you have a tracker mortgage which tracks the Bank of England bank rate, you will see a change in your monthly payments. This is a common mortgage type for many landlords, and according to the Bank of England, 43 percent of homeowners are currently on variable or tracker mortgages too, so if you’re included in this figure, then you may notice a slight increase in your expenditure each month going forwards now.
I’m on a standard variable rate mortgage
If you’re on a standard variable rate (SVR) mortgage, you’ll need to check what your lender has changed its rate to. The lender’s decision will impact the extra amount you will have to pay each month.
Considering all of the above, now could be a good time to review your finances and remortgage. This way, you could potentially switch to a better rate, or move to a fixed rate mortgage to give you the stability of regular payments at a set amount.
See our new TV advert 'Never Pay More Than You Need To' below, and get in touch to see if we can help save you money on your mortgage today.
To hear more about the base rate increase, read our Head of Lending, Brian Murphy’s, comment.
Because we play by the book we want to tell you that…
Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances.
The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.