Higher interest rates means more remortgages

New data from Moneysupermarket.com indicates that up to seven million homeowners in the UK will be looking for new mortgages if the Bank of England raises interest rates at the meeting of its Monetary Policy Committee this week. The new research by the price comparison website shows that an increase of £100 per month on a mortgage payment would mean seven million people looking to remortgage, while an increase in payments of just £50 would find 2.6 million new mortgages.

According to Moneysupermarket’s figures, a rise of 0.5 percent in interest rates would add £62.50 per month to a £150,000 interest-only mortgage. Added to the 0.75 percent in rate hikes since August, that means a rise in payments of 1.25 percent in the past year, according to the website’s head of mortgages, for an increase in payments of £156 per month. Even an 0.25 percent rise in rates this month would add £271.32 per year to the cost of a £150,000 repayment mortgage and £375 to the annual cost of a £150,000 interest-only mortgage.

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