Customers of Norwich & Peterborough Building Society (BS), Nottingham BS and Co-operative Bank could all see their mortgage rates rise by as much as 0.25 per cent.
The Base Rate has been kept on hold at 4.5 per cent for 11 months, which means that many homeowners with variable rates have had not had to face any increases in their payments. But thats set to change.
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The cost of fixed rate deals have already started to creep upwards as lenders look to their profit margins. And Darren Cook, head of mortgages at Moneyfacts, says that those on variable rates are at risk of increased payments too.
And its not just those on standard variable rates (SVRs) who will suffer. It will also affect those on discounted rates, which constitute around 40 per cent of the products available in the cases of Co-operative Bank and Nottingham BS.
Cook says: The Moneyfacts average mortgage rate is 6.44 per cent. If we take an average mortgage of £150K over 25 years, on an interest-only structure, a 0.25 per cent rate increase would cost the consumer an additional £31 per month hefty dent in your disposable income.
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Council of Mortgage Lenders (CML) figures from May indicate that consumers are looking for security when choosing their mortgage rate, with 72 per cent committing to fixed rate deals. But for those still looking for variable deal, a tracker mortgage may be more stable says Cook.
Usually tracker rates will track the Bank of England base rate, either at the same level, with a load or at a discount. So consumers can be confident their rate will remain stable, as long as base rate does not change, says Cook.
Cook suggests speaking to an adviser who can help you find the most suitable deal based on your individual financial, family and career plans both now and in the future.
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