Interest rates are locked in at a 16-year high
The Bank of England decided today to keep the base rate of interest at a 16-year high of 5.25 per cent, in order to bring inflation down to the government target of 2%. But for first-time buyers and new homeowners, this has effectively locked in an extra £290 per month on top of mortgage payments.
But following half a year of high interest rates, the cost to borrowers of loans and mortgages has ballooned, increasing the number of home repossessions due to debt defaults in the UK by 36% in just the first quarter of 2024. With data showing many homeowners paying an extra £3480 per year to keep up with their mortgage due to the high rate of interest, today's announcement by the central bank will have done little to ease the worries of mortgage holders.
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