UK Mortgage Prisoners Action Group says the Bank of England’s base rate hike announced earlier today could increase members’ average mortgage rates to 7.14% or more. 

The BoE upped the base rate by 75 basis points to 3%, which marks the biggest since 1989 and the eighth time the bank has hiked rates.

The UK Mortgage Prisoners Action Group says: “UK Mortgage Prisoners are running short of words in the face of consecutive rate rises. We, of course, never had the benefit of the decade of historic lows and were held on margins of around 4.15% above base.”

“We cannot emphasise enough the detriment these rates have caused mortgage prisoners. The Financial Conduct Authority and government are not grasping the urgency of the need for solutions and intervention.”

After today’s announcement, BoE governor Andrew Bailey states: “From where we stand now, we think inflation will begin to fall back from the middle of next year, probably quite sharply.”

“To make sure that happens, bank rate might have to go up further over the coming months.”

“We can’t make promises about future interest rates. Based on where we stand today, we think bank rate will have to go up by less than currently priced in financial markets. And that’s important because, for instance, it means that the rates on new fixed-term mortgages should not need to rise as they have done.”

The BoE governor adds that today’s decision “should not lead to higher mortgage rates”.

The UK Mortgage Prisoners Action Group explains that the support for mortgage interest is “unfit for purpose and vulnerable homeowners are treated differently to the rental sector when it comes to support to keep the roof over your head”.

The group has asked MPs to support an amendment to the Financial Services and Markets Bill. 

The bill requests that the government to “bring forward amendments to the Financial Services and Markets Bill to cap standard variable rates for mortgage prisoners at 2% above the Bank of England Base Rate and to ensure that all inactive lenders are forced to offer mortgage prisoners fixed rates”.

Commenting on the BoE’s decision, UK Mortgage Prisoners lead campaigner Rachel Neale says: “I feel like homeowners and particularly mortgage prisoner homeowners are having there lives decimated from these high rates.”

“The government must act on helping mortgage prisoners who they have abandoned and left for over a decade. Homelessness is now more than a real situation and one that is the ultimate punishment after a decade of high rates without relief.”

In September, Neale warned that mortgage prisoners could be facing rates of 9% and above in the current economic climate.