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Bank of England 0.5% rate hike: What it means for mortgages and savings

Sumary of Bank of England 0.5% rate hike: What it means for mortgages and savings:

  • It will increase the cost of new fixed-rate and existing variable rate mortgages.
  • During the pandemic house buying boom in 2020 and 2021, interest rates reached record lows with some deals priced at below 1 per cent – but now the cheapest fixed rate mortgage deals are charging more than 3 per cent, with the average for a two-year fixed mortgage going over 4 per cent for the first moment in nearly a decade.
  • This significant increase, along with the general cost of living crisis, is now reaching a point where some people may have to commence contemplating the viability of maintaining their mortgage and whether selling up and downsizing is a prospect that needs to be seriously considered. Will house prices be hit by rising interest rates?
  • The typical cost of a mortgage has been pushed up over the past 10 months by successive base rate rises.

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