As was widely expected, the Bank of England has just lifted its base rate from 4.75% a year to 5%. This decision takes the base rate to a five-year high, with mortgage rates soon to rise in its wake. What’s more, the money markets are pricing in another 0.25% hike in February, so there’ll be more pain to come for borrowers!
Obviously, any mortgage borrowers who aren’t on a fixed-rate deal (or possibly a capped rate) need to budget for higher monthly repayments in the months ahead. In particular, if you’re paying your lender’s standard variable rate (SVR, which is paid by all borrowers who don’t have a special-rate deal), then the latest rate hike may lift it to around 7% a year….