Commenting on the increase in the Bank Rate from 0.1% to 0.25%, Paul Broadhead, Head of Mortgage and Housing Policy at the BSA said:
"A rate increase is an important psychological moment as it is the first time that the Bank Rate has risen since August 2018. But right now we have just moved from the lowest Bank Rate ever, to the second lowest ever.
“Given the rising costs of energy and food and the tax hikes coming next year, it is helpful that eight in ten mortgage borrowers are on a fixed rate. These people will continue to pay the same each month until their fixed rate period ends. The 20% on variable rate mortgages are likely to see their payments rise, but I expect the increase to be modest, tempered by the highly competitive mortgage market which is still being driven by relatively high demand and a sparse supply of homes.
“Lenders are sensitive to the rising number of people facing a squeezed household budget and the advice to anyone worried about their ability to pay their mortgage is to get in touch with their lender early. Lenders will do everything possible to help.”