The Bank of England has raised its bank rate today for the first time in a decade - but we’re here to cut through the jargon and answer, what does this mean for you and your mortgage?
I’m on a fixed rate mortgage
Generally speaking, if you’re on a fixed rate mortgage, you won’t see a difference in your payments.
For those of you who still have a while left on your fixed rate mortgage i.e. 3 or 4 year fixed, you won’t notice any difference in your payments now. However, if you’re close to the end of your term, please bear in mind that when your term ends, you’ll fall onto the lender’s variable rate which could result in a rise in your payments.
I’m on a tracker mortgage
If you have a tracker mortgage which tracks the Bank of England bank rate, this means that you will see a change in your monthly payments. This is a common mortgage type for many landlords, and according to the Bank of England, 43% of homeowners are currently on variable or tracker mortgages too, so if you’re included in this figure, then you may notice a slight increase in your expenditure each month going forwards now.
I’m on a standard variable rate mortgage
If you’re on a standard variable rate (SVR) mortgage, you’ll need to check what your lender has changed its rate to. The lender’s decision will impact the extra amount you will have to pay each month.
In light of this, now could be a good time to consider remortgaging. This way, you could potentially switch to a better rate, or move to a fixed rate mortgage to give you the stability of regular payments.
If you’d like to speak to a mortgage adviser about the bank rate and what implications this could have for you, please feel free to get in touch with us now.