Mortgage rates are going up along with everything else in the UK due to the Bank of England raising the interest rates recently from 4% to 4.25%. This has put bank rates at their highest level since 2008 which has in turn put more pressure on the cost of borrowing.
It is estimated approximately two million homeowners on variable interest rate deals will see a rise in their repayments immediately following the bank rate rise to 4.25%. However, those who are on fixed-rate deals won’t see any difference in their monthly repayments just yet, but when the deal comes to an end, they are likely to be much more expensive.
One of the main reasons behind rising inflation is the cost of energy. From 1st April 2023, the energy price cap set by Ofgem was capped at £3,280. However, the government’s own Energy Price Guarantee will now apply instead which was set to protect households from rising energy costs.
The Energy Price Guarantee is currently set at £2,500 per year. The Energy Price Guarantee was originally going to rise to £3,000 from 1st April, but the government has confirmed that the £2,500 limit will now apply for a further three months from April until the end of June.
In recent news it has been said that mortgage rates are not looking to go down any time soon or at least in 2023. Instead they will continue to rise, which in turn means that homeowner may now have to wait a while longer before their mortgage repayments go down.