The Bank of England has raised interest rates further in what will be a blow to some borrowers in Northern Ireland, although others will see no immediate impact.
This is the 12th time since 2021 that the BoE has raised interest rates with the base rate increasing from 4.25% to 4.5%, the highest level since 2008.
The Bank has been hiking interest rates since December 2021 as part of plans to lower inflation, but today warned that it may take longer than expected to bring inflation down in the long-term.
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The move will mean that borrowing becomes more expensive for customers and will have a large impact on those who are on variable (or tracker) rate mortgages who could see their bills rise.
Helmut Elstner, managing director of The Mortgage Clinic, highlighted how the interest rate rise will impact mortgage borrowers in Northern Ireland, saying that those on fixed rate mortgages will notice no difference to their payments immediately but could see effects if their mortgage deal is due to expire in the coming months.
He said: "Those customers who are currently on a fixed rate mortgage will see no change immediately as a result of the Bank of England raising interest rates and will only be impacted when their deal is due to come to an end and they are going to move onto a higher standard variable rate, or onto a new more expensive fixed rate deal, which is understandably worrying for these groups of borrowers.
"My advice for these customers would be to have another mortgage deal secured to move onto ahead of their fixed rate deal coming to an end, to avoid going onto the higher lenders standard variable rates.
"Even though interest rates have been increased by the Bank of England, this does not mean that banks will start to offer worse deals for new fixed rate mortgages, because despite the BoE raising interest rates 12 times in a row, over the past six to seven months banks have actually being lowering their rates due to the high rate of competition within the market.
"Although it is still yet to be seen how banks and lenders will react to the interest rates announcements with regards to the mortgage deals.
"Customers who currently have variable mortgages will see an increase in their payments, which will be dependent on the amount of borrowing and length of their mortgage term. I have calculated that they will pay roughly £16 more per month for every £100,000 of borrowing over 25 years due to the recent rise of 0.25%
"However I do understand that while this may not seem like a large initial increase, there will be customers feeling the pressure as 12 consecutive small increases to the mortgage payments.
"While the announcement can seem worrying, people should not panic and check their deal to see where they stand. If they have concerns they should look to review their deal and see what options are available to them."
Chancellor Jeremy Hunt has said that while it is good news that the Bank of England is no longer forecasting a recession, the interest rate announcement will be disappointing for families with mortgages.
Chancellor Jeremy Hunt said: "Although it is good news that the Bank of England is no longer forecasting recession, today's interest rate rise will obviously be very disappointing for families with mortgages.
"But unless we tackle rising prices, the cost of living crisis will only carry on."
Speaking at a press conference on Thursday, Bank of England Governor Andrew Bailey, said that inflation rates are currently too high and that its aim is to reduce it to 2%.
He said: “Inflation remains too high and it is our job to get it to the 2% target and stay there.”
The Bank chief added: “Low and stable inflation is the basis of a stable economy.”
The Governor also defended rate hikes when it risks compounding the pain for borrowers.
He said: “We are very sensitive to this. If we don’t tackle inflation it will be worse for everyone.”
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