People with mortgages have been warned that their monthly bills may be higher now after a raft of tax cuts were unveiled last Friday.
It comes as the pressure continues to build for the Bank of England to hike the base rate up, in order to steady the pound. Since last week, homeowners have been growing increasingly concerned about what this means for inflation and mortgage bills.
It's also been suggested that the Bank of England may even be forced to introduce an emergency interest rate hike.
Wales Online reports that the series of recent base rate increases mean that a tracker mortgage is now about £210 per month more expensive than it was before the increases began last December.
A standard variable rate (SVR) mortgage is now about £132 more expensive per month, according to figures from UK Finance. Although most mortgage holders are on fixed-rate deals, 1.8 million of these are scheduled to come to an end next year - meaning many homeowners could see their mortgage bill soar when they need to take out a new one.
Some households could use any savings to pay down their mortgage, in order to keep their costs down. UK Finance said lenders should be in touch with customers when it's nearly time for their fixed term to end.
The Bank of England increased rates by another half percentage point to 2.25% last Thursday. But financial markets are speculating the Bank may act with another increase before its next meeting in November.
Stamp duty was among the taxes to be cut in last week’s Budget but the increase in house prices and mortgage rates are still predicted to have a dampening effect on the housing market. Nationwide Building Society reported on Monday that the amount spent by members to pay off debts, such as on credit cards and personal loans, is continuing to increase.
Spending on debt jumped by 18% in August compared with August last year, and increased by 4% per cent month-on-month.
Nationwide said the increase has largely been driven by people using credit cards to combat the rising cost of living, as well as those paying off debt they had before.
Mortgage spending in August was 8% higher than in August 2021, according to Nationwide’s figures. Spending on rent was up by 17% annually in August, Nationwide said, as the rental sector also deals with the impacts of rising costs.
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