Interest Rate Rise
The Bank of England on Thursday raised its base rate for only the second time in a decade, inching it up from 0.5% to 0.75%. What impact will it have on your mortgage, savings and the property market?
How will it affect me?
The direct impact on most people is minimal. Most people with large mortgages are on fixed rates, so the increase has zero impact. The proportion of borrowers with variable mortgages – which move up and down in price as the base rate changes – has fallen to only 35% compared with 70% in 2001.
I have a variable rate mortgage. How much more will it cost?
If you are on a tracker mortgage that matches any rise in the base rate, then an extra 0.25% adds £12 a month to a £100,000 repayment mortgage and £25 on a £200,000 loan. For the 400,000 households on Nationwide’s base mortgage rate, their monthly bill will rise from £449 to £461 (on a loan size of £100,000) and from £897 to £922 on a £200,000 loan.
Banks tend to push through rate rises on mortgages immediately but are much slower to raise savings rates. Photograph: Nick Ansell/PA
The Bank of England on Thursday raised its base rate for only the second time in a decade, inching it up from 0.5% to 0.75%. What impact will it have on your mortgage, savings and the property market?
What impact will it have on the property market?
In London and the south the market is in the doldrums but is more active in the Midlands and north. Expect more of the same; Brexit uncertainty, stamp duty rises and higher tax on buy-to-let is already hammering the capital’s market, so a 0.25% rate rise has little extra impact. In the rest of the country, economists are forecasting 2-3% annualised price rises.
Source: https://www.theguardian.com/business/2018/aug/02/how-will-interest-rate-rise-affect-mortgages-savings-and-property
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