BSA comments on the increase in the Bank Rate to 4.5%
Commenting on the increase in the Bank Rate from 4.25% to 4.50%, Paul Broadhead, Head of Mortgage & Housing Policy at the BSA said:
“As inflation rates remain above 10% a further Bank Rate increase was always a real possibility. It is, however, widely expected that we are now at, or very close to the peak.
“Following the 11 Bank Rate increases in the last 18 months, the interest paid to savers has been rising. Whilst the last decade has been a difficult time for savers, particularly those who rely on their savings for income, shopping around can now make a sizeable difference to the returns available. There is a wide range of savings accounts available, which vary depending on the provider, term and access required, with attractive rates available for all levels of savers.
“For mortgage borrowers, this latest increase is less positive, particularly for those who will be coming to the end of a fixed-rate term this year. Most will see a significant increase in their mortgage costs, which will be on average around £1761 extra a month for those with a two-year deal. Whilst our figures2 show that around nine in ten homeowners are not currently concerned about their ability to make their monthly mortgage payments, only time will tell whether they have factored future increases into their household budgets.
“Lenders continue to remain alert to borrowers who are worried about making their mortgage payments and are ready to offer tailored support to anyone who may be struggling.”
1. Based on a £130k mortgage for 25yr term. It compares the rate on the loan 2 years ago to the one available now (based on the latest data - March 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.
2. 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.