Millions of homeowners are braced for the biggest mortgage rate rise in nearly 30 years, with repayments increasing by thousands of pounds a year.
The Bank of England is expected to announce a sixth consecutive increase to the Bank Rate since December and the largest individual jump for 27 years today, with markets anticipating a rise from 1.25pc to 1.75pc.
Karl Thompson, of the Centre for Economics and Business Research, an analysis firm, said: “A half point rise is what we are expecting, which is something we haven’t seen in nearly 30 years. And the key point is that it will be coming on top of a succession of rate rises. We are entering a new era.”
A 0.5 percentage point rise will mean monthly mortgage payments for owners with an average £270,708 property with a 25pc deposit will cost £196 more per month than in November last year, before the Bank began raising rates, according to financial analyst Moneycomms and TotallyMoney, a credit app.
Nearly two million homeowners will be immediately hit by rising costs. Nationally, 1.1 million homeowners are on standard variable rate mortgages and a further 850,000 are on tracker rates, which will jump in response to the Bank Rate.