What the recent interest rate means for you

With The Bank of England recently raising interest rates from 1.25 per cent to 1.75 per cent, many of you will be wondering what this means and how it will impact your mortgage.

The increase of a half point is the largest single rise in interest rates for over 25 years, and is in a bid by the bank to rein in the soaring gas and energy prices.

Raising interest rates is one method The Bank of England uses to try and control inflation. As borrowing costs rise, it is hoped that people are encouraged to borrow and spend less, while also saving more.

What this means for mortgage holders is that monthly rates will go up. It is estimated that, on average, a typical tracker mortgage will be £52 more a month, and that a standard variable mortgage rate will rise by £59.

Jason Blunden, managing director of Evolve Financial Solutions, Allison Homes’ Partner Independent Financial Advisor said: “Rates are back to pre-Covid levels, but with factors around the world affecting where we can buy goods and what they cost, along with their availability, this has had an impact on how much the banks can buy their cash for.

“However, what the banks are finding is that the price at which they can buy five years fixed rate monies has dropped, indicating that they don’t feel that this will be a long period of uncertainty.”

To find out more about Evolve Financial Solutions and how they can help you, visit https://www.evolvefs.com/.

For more information on our developments, visit https://allison-homes.co.uk/developments/.