Mortgage rate rise Who will feel the most pain

Mortgage rate rise Who will feel the most pain

First, a reminder of that all too familiar step ladder upwards of the bank’s interest rates,
the driver behind more expensive mortgages. We’ve gone from 0.1% in November 2021 to 5%.
But what does all that mean in reality for homeowners? Well, look at this, your average
two and five-year fixed mortgage rates rising over the same period. A two-year from 2.34%
in December 2021 to 6.19%. And at the peak of the mini budget here, it was 6.47%. All of this
bad news for those trying to get on the housing ladder or refixing their mortgage. Here’s an
example for someone coming off a two-year fixed mortgage rate in the next few months.
If you borrowed £243,000 back in December 2021, paying it over 25 years on a 2.34% rate,
you’d be paying over £1,000 a month. Now, with the average two-year deal above 6%,
that’s going to be more than £1,500, an extra £480-ish a month. Over a year, though,
that’s more than £5,500. So who will be hardest hit? Well, overall, younger homeowners with larger
mortgages, specifically younger people in their 30s. They’ll be paying almost £360 per month
on average more, or around £4,300 extra per year. And it’s people living in London
and across southern England who will feel it the most.

Mortgage rate rise Who will feel the most pain

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