MORE than a third of homeowners can expect their mortgages to jump by around £180 a month over the next two years, according to the Bank of England. The Bank’s latest report into the UK’s financial stability revealed that about three million households are on mortgage rates below 3 per cent. 3 Average 5 year fixed mortgage rates This is because their fixed home loans were taken out before interest rates started rising and are yet to expire.
Even though interest rates are forecast to be cut soon, the Bank reckons these households will soon be paying 28 per cent more each month. This works out to an extra £2,160 a year. And about 400,000 households will be whacked with an even bigger hit of paying 50 per cent more, the Bank reckons.
More expensive housing costs have made it much harder for people to build up savings, it said. In better news, nearly a fifth of mortgage borrowers will see their monthly payments fall by the end of the year. About 1.
5million — 18 per cent of UK homeowners — have a variable rate mortgage which tracks the Bank interest rate. This means that they should benefit instantly as soon as the Bank lowers the rate. Money markets reckon there is a 50 per cent chance of the Bank cutting them to 5 per cent in September.
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