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Base rate rise could result in extra £1.8bn interest payments

A 0.25% increase in the Bank of England base rate will result in an extra £1.8bn a year in mortgage interest payments – or £152.3m a month, Sainsbury&#39s Bank says.

The bank calculates that a client with a £150,000 interest only loan and paying a typical high street lender&#39s SVR of 5.5% would see monthly payments rise by just over £31. The bank is urging homeowners who are concerned about their ability to manage their mortgage payments if interest rates rise, to consider switching to fixed rate mortgages.

Lucy Hunter, mortgages manager at Sainsbury&#39s Bank, says: “Our research shows there are 115,000 people with monthly mortgage payments of £2,000 or more. In total, there are 595,000 people paying over £1,000 and for some, particularly those who have over-extended themselves because of the low interest rate environment, any rise in their mortgage payments could make life financially difficult.

“Estimates suggest the Bank of England base rate could rise from 3.5% to 4.5% by the end of next year which would mean an extra £7.3bn a year in annual mortgage interest payments. On average, that would be equivalent to £465 for every person with a mortgage.”


Time to cap tax burden on home-owners, says CML

The amount of tax paid by home-owners has increased sharply in recent years and the government should ensure that it does not rise further, says the pre-Budget submission lodged with the Treasury yesterday by the Council of Mortgage Lenders. The submission points out that as well as paying more in tax, home-owners are being burdened […]

Education needed, not regulation, say compliance experts

Research says the government, not the Financial Services Authority, should be responsible for financial education Over 70% of financial services compliance experts believe consumer education is more important than tighter regulation when it comes to reducing mis-selling. The findings are based on research by Huntswood Outsourcing Solutions, conducted in conjunction with Financial World, the magazine […]

Portman unveils remortgage deal

Portman has launched a flexible two-year stepped discount remortgage product at 2.99%. Borrowers also have the option of switching to the security of a fixed rate in the first year without incurring any early repayment fees. The latest deal offers a discount of 2.41% below its SVR (currently 5.40%) in the first year, followed by […]

Amateur landlords need regulation

The Mortgage Code Compliance Board has called for the &#39amateur&#39 buy-to-let market to come under statutory regulation. With the number of entrants into the private letting market continuing to grow, the MCCB is concerned that many amateur landlords are unaware they have no form of protection. Though buy-to-let mortgages are considered as investments the MCCB […]

Jelf flexible benefits

In Focus: How to choose a flexible benefits provider — seven top tips

Jelf Employee Benefits looks at some of the key considerations employers should think about when reviewing and choosing a flexible benefits provider. Choosing the right benefits for your employees is one thing but delivering a successful employee benefits strategy is about understanding the complete picture and delivering it in a personalised way so that it resonates with each and every individual in your business. 


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