The Bank of England put up interest rates as expected by a quarter percentage point which now puts the rate at a six year high.
The current rate is now 5.5%. Michael Coogan from the Council of Mortgage Lenders said “This rate rise was a certainty even before it happened”.
Many financial expert have however stated that this raise buy just a quarter of one percent may not be enough to stop inflation rising. The inflation rate in the UK is now 3.1 percent and may raise further in the coming months.
It is believed that the Bank of England may have to raise rates again in June by a quarter point and rates may need to raise to 6 percent later in the years to say on top of inflation.
So what does this mean to mortgage borrowers?
If you have a £200,000 mortgage which tracks the Bank rate your mortgage will go up by around £30 per month. This rate raise may further increase the popularity of fixed rate mortgages.
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