Aldermore has raised rates on its variable mortgage rates by 0.25%, a day after the Bank of England raised rates for the third time in four months.
The challenger lender says customers with home loans linked to the Bank of England base rate will see them increase by 0.25% on 1 April.
It adds from 22 March, all new illustrations and mortgage offers, from origination, will reflect the new Bank’s new base rate.
The lender says its Aldermore managed rate, its standard variable mortgage rate, will increase to 5.23% from 4.98% on 1 April 2022 for existing customers.
From 22 March, all new illustrations and mortgage offers, from origination and product switch, will reflect the new Aldermore managed rate.
The move comes just over 24 hours after the central bank lifted its interest rate to 0.75% from 0.5%.
It is the banks third rate hike since December, when interest rates stood at a historic 0.1% low.
The Bank’s Monetary Policy Committee also revised up its assumptions last month that inflation, currently at 5.5%, would peak in April at 7.25%, due to the war between Russia and Ukraine, which is pushing up energy, food and other costs.
Prices rising by 5.5% in the year to January is the fastest rate for 30 years. The current level of inflation is well above the Bank’s 2% target.
The MPC now says: It adds: “Inflation is expected to increase further in coming months, to around 8% in the second quarter of 2022, and perhaps even higher later this year.”
It also warned that inflation could hit double-digits later in the year if energy prices again push up the energy price cap, which will be raised next month.
The MPC believes that falling consumer confidence, a result of squeezed household disposable incomes, will also dampen the UK’s gross domestic product.
The online mortgage broker says yesterday’s hike by the central bank will add a further £316.56 to average home payments on standard variable rates.
It says the central bank’s two previous since the end of last year have already lifted mortgage payments by £650.04, bringing total extra costs to £972.60 over a year.
Trussle’s mortgage repayment calculations are based on a two-year fixed mortgage with a 15% deposit, or £39,600, using a UK average house price of £264,000.
