This week the Bank of England increased interest rates for only the second time in the last ten years and signalled that further rises could be expected in the not too distant future.
The bank increased the rate from 0.5% to 0.75% and the rate is now at it’s highest level since March 2009.
The bank was expected to increase the rate back in March of this year but decided to wait a llittle longer until they were happy with the current economic conditions within the UK and the expected growth in the economy.
This rate increase will impact mortgage holders and will be immediately felt by anyone who is on a variable rate mortgage.
For a variable rate mortgage of £150,000 the rate increase will mean roughly an additional £220 will be needed each month towards the mortgage repayments.
It looks as though there may be a couple more increases of 0.25% during the next year or two. The impacts of Brexit on the UK economy may well factor in on this and it all depends on how the UK fares following the exit from the EU.