The average monthly repayments for a tracker rates could increase by £23.71 in the event of a 0.25% increase in the base rate, according to data released by UK Finance.
Ahead of the Bank of England’s base rate decision on Thursday (3rd August), UK Finance analysed mortgage market data, predicting how the market could be impacted.
If the Bank of England were to implement a 0.5% increase, tracker payments would grow by a monthly £47.43.
Meanwhile the average standard variable rate (SVR) repayment could increase by £15.14 as a result of a 0.25% increase, and a further £30.28 were we to see a 0.5% increase.
The data also found that, for homeowners, around 800,000 fixed-rate deals would end in the second half of 2023, with a further 1.6 million due to end in 2024.
There were a total of 8,840,000 residential mortgages outstanding, the bulk of which are fixed rate; UK Finance projected that these borrowers would not see an immediate change in their monthly payment if the bank rate were to rise.
There were a total of 2,040,000 buy-to-let mortgages outstanding, with the majority also being on fixed rates.
The number of arrears and possessions remained at low levels.
UK Finance said that the number of households in arrears in 2023 would remain below 1% of outstanding mortgages.
Currently, 46 mortgage lenders – representing over 90% of the mortgage market – have signed up to the Government’s new Mortgage Charter, committing to providing additional support for borrowers.
This includes giving customers approaching the end of a fixed-rate mortgage the chance to lock in a deal and request a better like-for-like deal if rates change up to six months ahead, and a guarantee of no possession within 12 months of your first missed payment.
