Interest rates increase to 3.5%

The increase was widely predicted, creating certainty and stability amongst lenders with some lowering fixed mortgage rates.

The cost of borrowing will increase monthly repayments for homeowners with a variable-rate mortgage. Those on a fixed-term mortgage won’t see any immediate impact from today’s announcement and free advice is available with one of our expert mortgage advisers if your deal is due to end within the next six months.

Remember, you can fix a price on a mortgage deal six months ahead of your current deal expiring. To find out the best rate possible, it is important to speak to an Independent Financial Adviser.

Based on a £300,000 property with a £270,000 mortgage over 30 years, your monthly repayments will increase by approximately £90 a month.*

The MPC’s decision to increase interest once again is in direct correlation to the Bank of England’s plan to battle inflation in the UK.

THE IMPACT OF HIGHER INTEREST RATES FOR SAVERS

 

A higher base rate is good news for savers or those planning for their retirement. An increase to saving rates should be passed on by both banks and building societies, providing customers with better rates on cash savings, likewise for pension providers on annuity rates.

IMPACT ON ADDITIONAL TYPES OF LENDING

 

Today’s 0.5% interest increase will also affect credit card, bank loan or car a car loan. Make sure to check your lending agreement to see if today’s announcement affects your loan.

HOW CAN WE HELP YOU?

 

With access to over 90 lenders and a panel of insurance providers, we are well equipped to find the right product and solution for you. If you would like to have a chat with one of our experienced mortgage advisers, click here.

Your home may be repossessed if you do not keep up repayments on your mortgage or secured loan.

*If you borrow £270,000 over a 30-year term at a representative APR of 6.3% variable and an annual interest rate of 4.04% variable you would pay £1,296 per month. A 0.5% increase in the base rate would increase the monthly payments to £1,381. Figures correct at the time of publishing 15/12/2022

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