Mortgage freeze decade is over

MORTGAGE payments of thousands of homeowners will increase by an average of £15 after the Bank of England raised the base rate for the first time in a decade.

The 0.25 per cent rise to 0.5 per cent wi l l hit borrowers on variable rates but offers slight relief to savers hit by inflation and suffering negligible returns.

The rise will only reverse the emergency cut seen in the aftermath of the Brexit vote shock in 2016 as the Bank sought to head off turmoil in the economy.

The Bank’s nine-strong Monetary Policy Committee voted 7-2 in favour and it marks the first increase since July 2007. The Bank signalled more increases are on the way as they look to dampen Brexit-fuelled inf lation, which they predict will peak at about 3.2 per cent this autumn.

The SNP said the Government mus t take urgent steps to boost the economy,

Kirsty Blackman MP said: “We will continue to call on the UK Government to scrap their reckless hard Brexit plan, and end austerity by injecting the investment necessary to allow our economy to truly flourish.” Credit information provider Equifax said 11 per cent of those with a variable rate or tracker mortgage said they couldn’t afford any increase in their repayments, with only 34 per cent able to afford an increase of five per cent. Equi f ax ’ s Lisa Hardstaff said: “Th i s research suggests the rate rise could be a shock for a number of homeowners. “We could be entering a new era.”