06th November 2003

Impact on Your Mortgages

This afternoon the Bank of England raised rates by 0.25%. We aim to help you understand this and its potential repercussions on your property portfolio.

As mortgage rates could change over the next quarter in reaction to the Bank of England decision, your mortgages payments are also likely to increase in line with this. For example, for an average size property of £90,000 where the 5% interest rate increases 0.25% to 5.25%, you will move from paying roughly £375 to £394 per month or an extra £227 each year.

For the latest mortgage quotes visit the Marketplace.

Buy-to-Let Mortgages | Commercial Mortgages

Calculate Your New Rates

To help you assess the impact of potential changes to your interest only or capital repayment mortgage payments we have compiled a simple reference guide for you to keep to hand.

1. How much are you currently borrowing? Example: £90,000 Take the figure in thousands = 90. (A)
2. What is the rough rate? Example for a buy to let: 5.00% to 5.25%. Check the table below and find the corresponding payment column. (B)
3. Multiply A X B.

Interest Only Mortgage Capital Repayment Mortgage Was 90 x 4.17 = 375.30 Was 90 X 5.84 = 525.60 Now 90 x 4.38 = 394.20 Now 90 X 5.99 = 539.10 Per Year = £226.80 more Per Year = £162.00 More Total Interest Rate (%) Multiple (B) Total Interest Rate (%) Multiple (B) 4.00 3.33 4.00 5.27 4.25 3.54 4.25 5.41 4.50 3.75 4.50 5.55 4.75 3.96 4.75 5.70 5.00 4.17 5.00 5.84 5.25 4.38 5.25 5.99 5.50 4.58 5.50 6.13 5.75 4.79 5.75 6.28 6.00 5.00 6.00 6.44 6.25 5.21 6.25 6.59 6.50 5.42 6.50 6.75 6.75 5.63 6.75 6.90 7.00 5.83 7.00 7.06 7.25 6.04 7.25 7.22 7.50 6.25 7.50 7.38

Hopefully this will help you work out some rough numbers!

Buy-to-Let Mortgages | Commercial Mortgages

Fixed Rates

Last quarter we told you that some Fixed rates were being withdrawn. This quarter we have seen most fixed rates rise by at least 0.25% but in most cases closer to 0.50%. The majority of lenders have already priced the Bank of England rate rise that we have seen today into their fixed rates. Fixed rates are likely to move even higher as the wide perception in the market is that this will not be the last rate rise.

What it means to you: Payments on variable/discount rates will rise. Some landlords may still want to consider switching to fixed rates or competitive discounted rates now to ensure against further rate increases. You can use our rate table above to work out how much effect each rate rise will have on you.

Buy-to-Let Mortgages | Commercial Mortgages

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Business Finance Online Info Centre

If you need more information on a particular product or service before investing/purchasing, try consulting our useful business finance reference section.

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