David Hollingworth, mortgage expert at L&C Mortgages comments on today’s decision by the Monetary Policy Committee to raise base rate to 0.75%
“The debate around interest rate movement has largely been one of ‘when not if’ since the increase in November last year. Although many borrowers do appear to have looked ahead and have sought to fix their mortgage rate, those that have failed to do anything so far may finally be triggered to revisit their situation.
“Although rates have been drifting upwards since the run up to the last rate hike, the fixed rate options are still very competitive. Those most vulnerable to rising rates will be borrowers on their lender’s standard variable rate (SVR).
“An increase of 0.25% for a £200,000 25 year repayment mortgage could increase monthly payments by around £25 or more. Reviewing their rate could offer them substantial cost savings as well as being able to lock their rate down and protect any further rate rises. Assuming that lenders apply any increase to their SVR, average SVR rates could be around 5%, although the range of SVR varies widely between lenders.
“We will be tracking lender SVR movement for borrowers to follow on our online SVR Watch which can be found at www.landc.co.uk/insight”
Kindly shared by L&C Mortgages