Amount the average monthly mortgage payment will rise after interest rate rise

manchestereveningnews.co.uk:

Homeowners on tracker mortgages are expected to see their monthly payments rise after interest rates were

The rise will mainly affect those whose mortgages are directly tracked by the Bank of England base rate. The base rate was raised by 0.50 percentage points on Thursday, going from 1.25 per cent to 1.75 per cent - the highest single jump since 1995.

Mortgage increases of £50.43 a month have been calculated by the trade association UK finance and is based on average mortgage balances. Over the span of a single year, this will lead to an extra £605.16 in mortgage costs.

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Simon Gammon, a managing partner at Knight Frank Finance, said: “Mortgage rates are now changing on a daily basis and lenders are giving borrowers and brokers little notice about repricing. We’re seeing two significant impacts on borrowers.

"Firstly, some homeowners who are nearing the end of their terms are facing a shock when they come to refinance, because they are unable to borrow as much as they hoped. Secondly, those who are looking to buy are realising once obtainable properties are now out of reach.”

According to the association, there are around nine million residential mortgages currently outstanding in the UK. Around three-quarters of these are fixed-rate mortgages which will not be affected by the rise in base rates.

However, variable-rate deals may increase from the hikes. It is believed that around nine per cent of outstanding mortgages are trackers while 12 per cent are standard variable rate (SVR) deals.

Some people may end up on SVR deals while their initial mortgage deal comes to an end. Those on SVR could see additional costs of £1,400