There is unlikely to be any significant increase in mortgage rates following the Bank of England’s latest interest rate hike, according to Ben Merritt, director of mortgages at Yorkshire Building Society.
Following former Chancellor Kwasi Kwarteng’s disastrous mini-Budget mortgage rates spiked, but Merritt told Radio 4’s Today show that the market had already factored in the latest rise.
Merritt said: “It is understandably an unsettling time for borrowers. This is the biggest increase we’ve seen in 33 years.
“The Bank Rate is just one of the factors that we use when determining mortgage rates, and the latest increase that we have seen was already factored into the financial markets.
“We are unlikely to see a significant movement in new rates for mortgage customers. The majority of customers are on fixed rate mortgages. Over nine in 10 [customers] actually take a fixed rate.
“Over the past few years, about 60% of them have taken longer term fixes, five years or longer, so they won’t see an immediate change to their repayments.
“But there are still 1.5 million people that are on trackers and lenders’ standard variable rates. Those customers will see an increase in their payments relatively quickly.”
Mortgage rates are gradually decreasing after having hit a 14-year high in October.
