Will my mortgage payments increase by £1,000?
Rishi Sunak, the Chancellor of the Exchequer, told Cabinet colleagues this week that he expects Bank Rate to increase to 2.5% over the next year. He warned that a one percentage point rise in the typical mortgage would add an extra £700 to the mortgage costs each year (or just under £60 per month).
However, few of us regard ourselves as 'typical', so team twindig has put together a mortgage payment calculator and ready reckoner tables to help you see how a one percentage point increase in mortgage rate would impact you.
Twindig mortgage payment calculator
Simply fill in the size of your mortgage, the term (in years) and the interest rate you are or will be paying and we will calculate your monthly mortgage payment
Will my mortgage payments increase if interest rates rise?
This will depend on what type of mortgage you have.
If you have a fixed-rate mortgage the mortgage rate will not change during the fixed-rate period, therefore your mortgage payments will not increase during the length of time your mortgage rate is fixed.
Standard Variable Rate mortgage
If you have a Standard Variable Rate (SVR) mortgage your mortgage provider will likely pass on any increase in Bank Rate to you. If the Bank of England raises Bank Rate by one percentage point, your mortgage rate is likely to increase by the same amount.
Bank or Base Rate Tracker mortgage
If you have a Bank Rate or Base Rate Tracker (BTR) mortgage any change in the Bank of England's Bank Rate (either up or down) will be passed on to you. Your mortgage rate will therefore track the changes in Bank Rate.
Mortgage payment ready reckoner tables
How to read the tables below
On the left-hand side, we show the mortgage amount (how much you currently owe) and along the top a range of mortgage rates. The tables assume a 25-year mortgage term and a repayment mortgage. To look in more detail at your specific situation you may find our mortgage payment calculator helpful.
Pick the mortgage rate that is closest to your current mortgage rate and the table shows how much your mortgage payment will increase if the mortgage rate increases by one percentage point (ie from a mortgage rate of 2.0% to 3.0%).
For instance, if you have a £100,000 mortgage and your current mortgage rate is 2.0%, your monthly mortgage payment would increase by £49 per month.
The second table shows the impact on your annual mortgage payment. The £49 increase per month referred to above means that over one you would pay an additional £590 on your mortgage.