The Bank of England (BoE) has raised interest rates four times in a row since December 2021, from 0.1 per cent to 1 per cent.
Inflation is growing at it fastest rate in 30 years and expected to increase further, with fuel, energy and food costs soaring.
If you have a loan or mortgage that charges you a variable interest rate, you might find the cost of your repayments go up.
For example, if you have a £130,000 mortgage that you want to pay off over 25 years and the interest rate on the mortgage is 2.5 per cent, the monthly repayment will be £583. But with a 0.25 percent increase the monthly amount would increase by £17 to £600
Based on a £2,000,000 mortgage that you want to pay over 25 years and the interest rate on the mortgage is 2.5 per cent, the monthly repayment will be £8,972. But with a 0.25 per cent increase the monthly payment would rise to by £254 to £9,226
If you’re on a fixed rate you won’t see any change until the end of your fixed period, but it prudent to start looking before your fixed rate ends.
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