Data from UK Finance shows how the Bank of England’s decision to hold the bank rate at 4.25% today will impact UK homeowners with outstanding residential mortgages.
While the rate-setting panel cut the base rate by 25 basis points at their last meeting in May, most economists predicted there will be a pause before any further reductions.
Last week, Canada Life Asset Management investment director for liquidity Steve Matthews said: “We expect the Bank of England to hold rates steady this month. Inflation remains persistent, employment data is stable, and GDP prints have been benign – suggesting no immediate need for further cuts.”
The Office for National Statistics also announced yesterday that inflation remained at 3.4% in May.
Yesterday, L&C Mortgages associate director David Hollingworth stated a cut today “would be seen as a shock”.
UK Finance has released figures to show the average monthly payments and interest rates for various different mortgage types.
Tracker – average balance outstanding £139,042.
SVR – average balance outstanding £66,576
Fixed – average balance outstanding £167,691
In this representative calculation, the average current mortgage interest rate is 5.93% for tracker; 7.38% for SVR and 3.65% for fixed.
Average current monthly interest payments are £687, £410 and £510 respectively and average total payments (for borrowers on capital and interest) are £991, £652 and £943 for the three mortgage types.
UK Finance data shows there are around 7.1 million fixed mortgages, 591,000 tracker mortgages and 540,000 borrowers on a SVR, representing 81%, 7% and 6% of the mortgages respectively.
