Martin Lewis has issued a stark warning to homeowners in the UK after the Bank of England's latest announcement. On Thursday (December 15) the Bank announced that it has increased interest rates by 0.5 per cent to 3.5 per cent in what is the ninth consecutive rise this year.
The interest rate was raised to 3 per cent on November 3 after rising by 0.75 per cent - the biggest interest rate increase since 1989. The base rate of 3.5 per cent is now the highest rate that the UK has seen in 14 years since the recession in 2008.
The Monetary Policy Committee voted by a majority of 6-3 to increase the Bank rate to 3.5% in a bid to tackle inflation and soaring prices amid the crippling cost of living crisis - but with rising interest rates comes bad news for many homeowners.
READ MORE:
Minutes after the news broke at 12pm, financial expert Martin Lewis took to Twitter to issue mortgage holders with a word of warning.
Millions of homeowners across the UK are now expected to be affected as mortgage rates could spike in line with the interest rate rise.
Speaking to his 2 million followers, Martin warned that the 0.5 per cent increase could raise monthly mortgage repayments for those with variable rates mortgage deals and other forms of borrowing.
The tweet read: "Bank of England base rate up 0.5% pts to 3.5% - Variable/tracker rate repayment mortgages will rise c.£25/mth (£300/yr) per £100,000 of mortgage (use mortgage calc to check)."
This means that anyone who has a variable or tracker rate mortgage, one that adjusts in line with interest rates, could be paying a minimum of an extra £25 a month, or £300 a year, for every £100,000 of their mortgage.
Martin advised that homeowners should use a mortgage calculator to check how much their repayments could go up by more accurately.
He also added that those with fixed rate mortgages most likely won't be affected as he tweeted: "Existing fixes won't change. New fixed rates've already likely baked much of this rise in."
Martin also issued advice for those with savings account amid the interest rate rise.
He wrote: "Top paying easy access savings accounts will likely rise but it can take a month. Most big bank savings will continue to pay diddly squat, so check, ditch & switch.
"Unlikely to see top fixed savings rise much, as this news was well-flagged & thus prob factored in."
Sign up to our free weekly property newsletter by clicking here
READ NEXT:
