Mortgages
Expected base rate rise could push tracker mortgages up by £300 a year
Tracker mortgage and standard variable rate (SVR) mortgage payments could increase by nearly £300 and £200 a year respectively if the expected 0.25 per cent base rate increase this week takes place.
Experts widely expect the Bank of England to increase the base rate by 0.25% to 4.5% this Thursday.
According to UK Finance figures, if the 0.25% increase goes through, tracker mortgage monthly repayments would rise by £23.71 and SVR payments would increase by £15.14 per month.
This is equivalent to £284.52 per year for tracker mortgages and £181.68 per year for SVR mortgage deals.
UK Finance said that, as of December 2022, there were 639,000 tracker residential mortgages outstanding and 773,000 outstanding SVR mortgages.
This made up 8% and 9% respectively of residential mortgages outstanding in the UK, according to the trade body.
The current average rate for tracker mortgage is 4.6% and for SVR deals it is 5.91%.
The average current monthly interest payment for tracker deals is £436 per cent month and £358 per month for SVR deals.
A UK Finance spokesperson said: “Lenders stand ready to help anyone struggling with their mortgage payments. If you’re struggling, don’t put it off – speak to your lender as early as possible. Banks have a range of tailored options available to help and your lender will work with you to find the best option for your individual circumstances.”
