LONDON homeowners on a typical £300,000 tracker mortgage face paying £420 a month more than a year ago in the run-up to Christmas after the Bank of England raises interest rates on Thursday.
The Bank is forecast to increase the cost of borrowing by 0.75 per cent from 2.25 per cent to three per cent - the biggest hike in 33 years - when its monetary policy committee meets to consider its response to soaring inflation.
The move will have an immediate knock-on effect for mortgage holders with tracker or variable rate trackers that move in line with the Bank of England's base rate.
Calculations by Ray Boulger, technical manager at broker John Charcol, show that the best tracker deal on a £300,000 repayment mortgage would have cost £1,359 when the Bank's base rate was at its lowest of 0.1 per cent before last Christmas.
But if, as expected the Bank raises its key rate to three per cent this week-in what would be its eighth consecutive hike - the same loan will cost £1,779, or £420 more, from the next repayment date.
This story is from the November 01, 2022 edition of Evening Standard.
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This story is from the November 01, 2022 edition of Evening Standard.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
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