Each time interest rates are hiked, anyone with a tracker or variable mortgage rate sees their monthly repayments go up
Brits face paying £5,400 more this year on their mortgage, stats suggest. Homeowners’ payments are set to rise as interest rates soar to combat rising inflation.
Those on a £150,000 25-year mortgage on a standard variable rate would pay £1,800 extra this year if their repayments rise in line with the Bank of England’s base rate of interest.
And those with a £450,000 mortgage would pay £5,400 extra, L&C Mortgages figures show.
Inflation has hit 5.5%, according to latest figures, and is widely expected to pass 7% in April, pushing up the cost of living for Brits.
Some reckon it could reach 8% this year, a level not seen in 31 years, the Daily Mail reports.
Traders are also predicting seven interest rate rises this year as the Bank of England tries to control the spending squeeze.
The Bank raised rates in December for the first time in three years, and another hike this year means the base rate of interest at 0.5%.
But if the expected seven rises occur, the Bank’s base rate could reach 2% this year – the highest since 2009.
Each time interest rates are hiked, anyone with a tracker or variable mortgage rate sees their monthly repayments go up.
Seven rate hikes could add thousands to the amount households repay on their loans each year, heaping further misery on those already battling a cost of living crisis.
The increasing cost of living will put pressure on Prime Minister Boris Johnson to scrap his 1.25 percentage point rise in national insurance, set for April.
Foreign Secretary Liz Truss insisted the rise was necessary to keep government finances in good shape.