Millions of homeowners could face a £ 1,000 increase in their mortgages if interest rates continue to rise


Millions of homeowners could face a £ 1,000 increase in their mortgages if interest rates continue to rise

  • Homeowners can expect higher mortgage bills if interest rates continue to rise
  • Analysts predict base rate could reach 1% before year-end
  • Higher rates should put more pressure on struggling families










Millions of homeowners face mortgage bill hikes of around £ 1,000 next year if interest rates continue to rise as expected.

The Bank of England’s decision to raise the base rate from a record 0.1% to 0.25% yesterday will add an additional £ 144 per year to the cost of a typical home loan.

And some analysts predict it could reach 1% before the end of next year. According to broker L&C, borrowers with a typical mortgage of £ 150,000 over 25 years, at a standard variable rate of 3.59%, would pay an additional £ 75 per month, or £ 900 per year.

Huw Pill (pictured), the chief economist at the Bank of England, said he believed there were more rate hikes to come

When asked if there were any more rate hikes coming up, the Bank’s chief economist Huw Pill said, “Yes, I think that’s true.”

He said worries about skyrocketing inflation, which is expected to hit a 30-year high of 6% next year, meant “now is the time to act”.

Yet higher interest rates will put even more pressure on struggling families whose budgets are already squeezed by a perfect storm of household bills and tax hikes.

Millions of homeowners face mortgage bill hikes of around £ 1,000 next year if interest rates continue to rise as expected (file photo)

Millions of homeowners face mortgage bill hikes of around £ 1,000 next year if interest rates continue to rise as expected (file photo)

The average household energy bill is expected to hit £ 1,891 per year from April, while the costs of food, gasoline and municipal taxes also rise.

This came as Halifax predicted that house price growth would slow significantly next year, with average increases in the range of 0-2%.

The average price of real estate has risen 8 percent this year.


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