Interest rates hikes to end ultra-cheap mortgages for millions, Bank of England’s boss warns
Homeowners could end up hundreds of pounds out of pocket after the Bank of England's boss signalled that at least four interest rate hikes are on the horizon
HOMEBUYERS face a clobbering after the Bank of England’s boss yesterday warned at least four interest rate rises are looming.
Governor Mark Carney said they will be “spread out” to ease the pain — but that over the next few years those with mortgages can expect to see “something more than three."
The first increase is likely to be in May.
It will finally signal the death knell for cheap mortgages that borrowers have enjoyed for a decade.
Last November saw the first hike since the 2008 financial crisis sent rates spiralling downwards.
The 0.25 per cent increase took the Bank of England’s rate to its current level of 0.5 per cent.
If there are four similar rises, they would add up to a full one per cent.
Millions of borrowers would each face forking out hundreds of pounds extra a year on their repayments.
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But at the same time there would be no return to the kind of sky-high interest rates the UK has seen in the past, Mr Carney yesterday assured MPs.
He said as he faced the Commons Treasury Select Committee: “We don’t think that’s what’s necessary for the economy, and so the pacing of this is accordingly slower.”
Figures yesterday revealed fixed rate home loans have already started creeping up from a record low.