UK Finance has revealed the impact on the average variable rate mortgage should the Bank of England (BoE) increase the base rate once again on Thursday.
Despite UK inflation falling, many are predicting the BoE may raise the base rate by 0.25% or even 0.5%.
It currently stands at 5.25%.
UK Finance – the trade association for the UK banking and financial services sector – says a 0.25% increase would see the average monthly repayment for a tracker increase by £26.22.
The average standard variable rate (SVR) mortgage repayment would rise by £14.53 a month.
Meanwhile, a 0.5% increase to the base rate would see the average monthly mortgage payment for those on a tracker rise by £52.44 and those on a SVR by £29.06.
The increases in average monthly mortgage payments are calculated using an average outstanding balance of £125,854 for tracker mortgages and £69,740 for SVR mortgages.
UK Finance estimates that there are around 800,000 fixed-rate deals ending in the second half of 2023, with double that – around 1.6m deals – due to end in 2024.
Overall, there are a total of 8.8m residential mortgages outstanding, the bulk of which are on a fixed rate.
UK Finance says there are a total of 2,030,000 buy-to-let mortgages outstanding, with the majority also being on fixed rates.
