What will an interest rate rise on Thursday mean for your mortgage?
Most people’s mortgage deals are either fixed-rate or variable. A fixed rate deal is for a set period, whereas with a variable rate deal, the interest rate can move at the discretion of their lender. If you have been on the same mortgage deal for quite a few years now, you’re most likely on a variable rate deal.
A 0.25% rate rise would cost about 12 extra a month on a 100,000 mortgage, and about 25 more on a 200,000 mortgage. If you have a fixed rate mortgage, you are protected from rate rises until the fixed term on your deal ends (although you won’t benefit from any fall in the base rate either).
Of course, when interest rates rise or fall mortgage rates will follow suit. Below is a short potted history of the latest views: After much speculation that interest rates would finally go up in 2015 it didn’t happen because inflation suddenly turned negative.
A rise in the key interest rate. yellen reiterated on Thursday, heightening the probability the Fed will forge ahead with a hike in December, despite initial doubts in the wake of Donald Trump’s.
Interest rates: What the rise means for your mortgage, loans and investments The Bank of England has increased the benchmark rate from 0.5% today Ben Chapman @b_c_chapman
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Whilst interest rates are notoriously difficult to forecast, it can be useful to understand what would happen to your payments if rates do change in the future. We might not be able to definitively say when interest rates will fall or rise, but we can give you an accurate figure as to what a change would do to your monthly mortgage payments.
If you want to talk to someone about what the interest rate rise means for you and your mortgage, or for general advice on mortgage and re-mortgage options, visit Alexander Hall or ring them on 08000 38 37 36.
After setting new lows last Thursday. you ask your loan originator for an explanation of the characteristics that make your loan more expensive."No point" loan doesn’t mean "no cost" loan. The best.
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A borrower with a 200,000 25-year term mortgage paying a standard variable rate of 4.5 per cent would see their annual repayments rise by 330 a year if the rate rose to 4.75 per cent. The most likely effect will be borrowers rushing to fix, as lenders withdraw their best deals.