Bank of England Warns of Fixed Rate Mortgage Increases

Bank of England Warns of Fixed Rate Mortgage Increases

Homeowners on fixed-rate mortgages have enjoyed some protection from recent interest rate hikes, but the Bank of England is cautioning them to prepare for the end of their home loan terms to avoid financial difficulties.

Last week, the Bank of England implemented the largest single interest rate hike since 1989, raising it from 0.75 percent to three percent.

For those with tracker or variable rate mortgages, this increase will result in significantly higher monthly payments. According to Money Saving Expert Martin Lewis, this could translate to an extra £40 per month for every £100,000 of mortgage.

Even fixed-rate customers, who have seen no immediate changes, are not entirely exempt from concern. Martin Lewis emphasized the importance of knowing the end date of your fixed-rate mortgage.

He advised preparing three to six months in advance of the term's conclusion. This preparation might involve cutting down on expenses and ensuring there's sufficient funds in the bank to cover the additional mortgage costs.

Spring 2023 is anticipated to be a particularly challenging period, with the expected end of the energy price guarantee in April and mortgage and interest rates likely to be at their peak.

The government is set to announce its updated fiscal plans in the coming week, after a slight delay due to changes in leadership.

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