BSA comments on the increase in the Bank Rate to 4.25%
Commenting on the increase in the Bank Rate from 4.0% to 4.25%, Paul Broadhead, Head of Mortgage & Housing Policy at the BSA said:
“As household budgets continue to be squeezed, another Bank Rate increase will be an additional budget challenge for borrowers on variable rates and those coming off a fixed rate this year.
“It is positive that our latest figures1 show that around nine in ten homeowners are not currently concerned about their ability to make their monthly mortgage payments. However, there are around 1.8 million households coming to the end of a fixed rate in 2023 and most will see a significant increase in their mortgage costs. On average this will be around £2202 a month for those coming to the end of a two-year deal.
“Only time will tell whether these increases have already been factored into household financial planning. Lenders remain alert to borrowers facing a payment shock and are ready to offer tailored support to anyone who may be struggling.”
1. The March Property Tracker survey fieldwork was undertaken between 1-2 March 2023. The total sample size was 2099 adults. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+). All figures, unless otherwise stated, are from YouGov Plc. The full Property Tracker Report can be downloaded here.
2. Based on a £130k mortgage for 25yr term at 75% LTV. It compares the rate on the loan 2 years ago to the one available now (based on the latest data - February 2023) on the same basis i.e. assumes 2yr fixed will re-mortgage onto another 2yr fixed at the same LTV and for the same £130k. The average increase across all 2yr fixed is £180.