Britain COST UPS Provident Britain

What does the Bank of England interest rate rise mean for you?

Reading now: 739
theguardian.com

The Bank of England has voted to raise interest rates by 0.5 percentage points to 1.75% as the UK battles to prevent inflation running out of control.

We look at what that means for your finances.It depends what type of deal you are on. Most borrowers are on fixed-rate mortgages, and so for the time being at least they are insulated from the impact of the latest interest rate rise.However, the banking body UK Finance says about 21% of households are on a variable rate – either a tracker mortgage, where the rate you pay is explicitly linked to the Bank base rate, or their lender’s standard variable rate (SVR).About 800,000 borrowers have a tracker mortgage, while approximately 1.1 million are on an SVR.A tracker mortgage will directly follow the base rate – the small print of your mortgage will tell you how quickly the rise will be passed on, but next month your payments are likely to go up, and the extra cost will fully reflect the base rate rise.On a tracker at 2.5%, the interest rate would rise to 3%, adding £38 a month to a £150,000 repayment mortgage with 20 years remaining.With SVRs, things are less straightforward: these can change at the lender’s discretion, but many people will probably see an increase in their monthly costs.

Read more on theguardian.com
The website fvbb.com is an aggregator of news from open sources. The source is indicated at the beginning and at the end of the announcement. You can send a complaint on the news if you find it unreliable.

Related News

DMCA