Bank of England’s interest rate rise could leave you £500 lighter — plus find out how to win £5,000 with Sun Savers
DECISION-MAKERS at the Bank of England could choose to raise interest rates for the first time in more than ten years on Thursday.
An expected rise of 0.25 per cent could mean that some mortgage customers see their annual bill rocket by more than £500.
Sun Savers takes a look at the ways a rate rise could affect you.
- Homeowners: Those households with a tracker mortgage or standard variable mortgage will likely see a rise in their monthly payments, and it could add up to a lot over 12 months.
Money expert Andrew Hagger says that on a £200,000, 20-year variable deal, rising to 3.99 per cent, the mortgage would rise from £1,184 to £1,211 a month, or £324 a year more, if the increase is fully passed on to the customer by the lender.
For a £350,000 mortgage, payments would increase from £2,072 to £2,118 a month — £552 a year more than what they’re currently paying.
Those on fixed-term deals will not be impacted and if you don’t want the worry of potential future rises, then you could consider switching to a fixed deal.
The Yorkshire Building Society says it has already seen customers take action, with an almost doubling of fixed-term applications since August.
Andrew said: “If you are on a tight budget it’s definitely worth looking around for a fixed-rate mortgage.“It will give you the peace of mind that your biggest monthly outgoing isn’t going to go up any further.”
- Borrowers: Borrowing money on a credit card will also get more expensive — but not by much.On a balance of £5,000, you’ll pay an extra £1 per month in interest.
Some providers like Barclaycard will automatically move their rates in line with base rate.
Others will follow suit but not necessarily straight away, so keep an eye out for a letter notifying you of any changes.
- Savers: It’s been a tough decade for savers, as the record-low rates have given them a rubbish return on their savings.
So a rate-rise will be welcomed — though it’s only a very small first step.
A 0.25 per cent rise on a balance of £2,000 will gain an extra £5 in interest, not a lot to shout about.
And you’ll need to check you are getting the raise as in the past not all banks and building societies have passed the full rate increase on to their customers.
Did you know?
- 42 per cent - proportion of homeowners who have never had a rate rise, according to Which?
- 0.25 per cent - what the Bank of England base rate currently stands at
- 11.1million - the number of mortgages in the UK
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Win £5,000 cash
WITH winter just around the corner and the autumn chill forcing us to put the heating on, now is the time of year our household bills start to increase.
But The Sun is here to help as we’re giving you the chance to win £5,000 to put toward your bills for a year.
TEN lucky winners will get £5,000 cash each.
To enter, simply join Sun Savers today. Then collect ten Sun Savers codes before Tuesday, October 31.
Today’s code and how to join Sun Savers is on further down. Once you have your ten codes, you will be prompted to enter. Make sure you enter by Monday, November 13.
TERMS AND CONDITIONS: Collect TEN Sun Savers codes from the 18 printed in The Sun between today, Saturday, October 14, and Tuesday, October 31, 2017. Last chance to join in is Sunday, October 22. Competition closes at 23:59 on Monday, November 13. Over-18s, residents of the UK only. One entry per person.
Winners will be selected at random from all valid entries. There will be TEN winners of £5,000 only. Allow 28 days from entry closing for the draw to take place. Winners will be notified within seven days. No cash alternative to prize in whole or in part. Prize is non-transferable. Your information will only be used for the purposes of this competition. Promoter is News Group Newspapers Ltd.
Not open to staff of the Promoter and promotional partner or their families. The winners will be required to participate in reasonable publicity relating to this competition. The Editor’s decision is final.
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