What will the interest rate rise cost you? Average homeowner in Britain will have to pay another £552 a year after Bank of England raises rate to 0.5%
Millions of homeowners face punishing mortgage bill hikes in the coming months after interest rates rose to 0.5 per cent today – meaning the average Briton could now endure extra repayments of £552 per year.
The increase is the second rise in seven weeks, after the interest rate edged up from 0.1 per cent to 0.25 per cent in December, and it comes on the day that Ofgem increased the energy price cap by 54 per cent to £1,971.
For anyone who has just bought a home for the UK average of £276,000 and has an 80 per cent loan on a tracker rate, the 0.25 percentage point rise in interest rates to 0.5 per cent means extra repayments of £552 a year.
What do experts say about the interest rate and mortgage rate rises?
Rob Peters, director of Altrincham-based Simple Fast Mortgage:
‘Savers will be rubbing their hands with glee but there’s still a long road of rate rises ahead. Having accepted dismal returns for years during this period of low interest rates, those with cash in the bank may finally start to see a return on their money. But where there are winners, there are losers too. Whilst the rich get richer, mortgage borrowers will be less excited about the rising rates as this will mean higher costs, if not immediately, then certainly at the end of their current fixed rate deal.’