how much more you’ll pay if interest rates rise

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First time buyer

A first-time buyer bought his £250,000 home with a 10pc deposit and a two-year mortgage rate of 2.1pc in August 2019.

If they renewed with a mortgage rate of 4.75% – the current market average – they would pay around £306 more per month than their current rate.

At £1,312, this new rate would see a well-paid worker go from a third of their take home pay on a mortgage to almost half.

And if they renew next June, when mortgage rates could reach almost 8%, they would owe £1,731 a month – effectively unaffordable on their salary.

Mid Road

Someone is renewing a mortgage on his semi-detached house which he bought ten years ago with a healthy deposit of 25pc for £221,000.

Their current rate, 1.59pc, ends; using the current average, they would see their monthly payments drop from £621 on their current rate to £774.

In the worst case, it would rise to £945 if the Bank of England rate hits 6% next year.

near the end

This person bought their single-family home over two decades ago and only has two years left on their mortgage.

They bought it for just £131,000, the average in England at the time, with a 25pc deposit. They have been on a mortgage rate of 1.59 pc for the past two years.

Because they bought their house when prices were cheap and their remaining mortgage is low, an increase in the average current rate will see their payments rise from £333 to £344 a month.

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