Average variable monthly mortgage payments will rise to just under £50 if the Bank of England lifts the base rate by 50 basis points tomorrow, data from UK Finance shows.
A large minority of investors are betting the central bank’s hike will be as high as 50 basis points after inflation unexpectedly remained unmoved at 8.7% in the year to May, according to National Office for Statistics today.
The banking association says a rate rise of this size will lift average monthly tracker mortgage payments by £47.43 and average monthly standard variable rate loans by £30.28.
If the Bank’s Monetary Policy Committee lifts the base rate by 25 basis points, from its current 4.5% level, average monthly tracker mortgage payments will lift by £23.71 and average monthly standard variable rate loans by £15.14.
Homeowners on variable rate loans are likely to see quicker rises than the 1.4 million property owners on fixed-rate deals that are due to expire this year.
The banking body also points out there were 76,630 homeowner mortgages in arrears of 2.5% or more of the outstanding balance in the first quarter of this year, 2% more than in the previous quarter.
It adds that 7,030 buy-to-let mortgages were in similar arrears in the same period, 16% more than in the previous three months.
The association says repossessions remain “low,” with 750 homeowner mortgaged properties taken into possession in the first quarter, up 50% on the previous quarter.
While 410 landlord mortgaged properties were taken into possession in the first three months of this year, 28% higher than in the previous quarter.
