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 increase the base rate from a record low 0.1 per cent to 0.25 per cent yesterday will add an extra £144 a year to the cost of a typical home loan.
Some analysts believe it may reach 1 percent by next year’s end. This would see borrowers with a typical £150,000, 25-year mortgage, on a standard variable rate of 3.59 per cent, pay an extra £75 a month, or £900 a year, according to broker L&C.
Huw Pill, the Bank of England’s Chief Economist (pictured), said that he thinks there will be more rate increases to come.
Huw Pill, Bank Chief Economist, said that he believed there would be further rate hikes.
He stated that concerns over soaring inflation which is predicted to surpass 6% in the next 30 years, was a sign it was time for him to get involved.
Higher interest rates will add to the pressure for struggling families already under severe financial strain due to a storm of tax and household bills.
Millions of homeowners face mortgage bill hikes of around £1,000 next year if interest rates continue to rise as expected
The average household energy bill is set to soar to as high as £1,891 a year from April, while food, petrol and council tax costs are all rising too.
Halifax had predicted that house prices would slow down next year with an average increase of between 0 to 2%.
This year, the average price of a property rose 8 percent.