Variable or base rate borrowers “likely to see payments increase”

Friday 05 August 2022

Interest rates have been pushed up 0.5 percentage points to 1.75% by the Bank of England, the highest interest rate hike in 27 years.

Those with variable or base rate tracker mortgages are the most likely to be severely impacted, however mortgage provider, Skipton International, suggests many people in Guernsey have already prepared for this.

“Borrowers with a variable or base rate tracker mortgage are likely to see their payments increase,” said Roger Hughes from Skipton.

“However, as rates have fluctuated over the past year, fewer borrowers are choosing variable rates, opting instead for fixed rate mortgages as a security against potential rises.

“Those on fixed rate deals will be sheltered from interest rate rises for the duration of their product term.”

Pictured: Mr Hughes said Skipton will be reviewing its mortgage products “accordingly”.

The latest hike is the sixth since December 2021 and the Bank of England is predicting a recession to begin by the end of the year.