Bank of England raises interest rates to 0.25%
The Bank of England has raised interest rates for the first time in more than 3 years, in response to calls to tackle the increase in property prices!
With house prices increasing at the fastest pace in the last 10 years, where the month of November 2021 alone saw an increase of 10% in property prices, the Bank of England felt that it needed to increase the base rate to 0.25% from 0.1% to try and stabilise house prices to ensure the long term affordability to first-time buyers, and buyers with lower deposits.
The rise to 0.25% also means that some homeowners will see an increase in their mortgage costs, especially those on a tracker or variable rate. The cost of living has also risen by 5.1% in the year to November, causing the highest rate of increase since September 2011 and above the Bank of England’s 2% inflation target.
Homeowners on a repayment tracker mortgage are expected to see an average increase of £15* per month on their mortgage payment. Those on a standard variable rate are expected to see an average increase of £10* per month on their mortgage payment.
*increases are subject to the lenders' decision. This figure is only an expected guide.