Today’s interest rate hike may hit mortgage holders hard, warns IFS director ahead of BoE announcement
Paul Johnson, director of the Institute For Fiscal Studies, warned this morning of the impact on people’s mortgages of an expected interest rates hike by the Bank of England on Thursday.
“We are still at historically staggeringly low levels of interest rates,” he told Radio 4’s Today programme.
“So you look at it that way and think one quarter of a percent, half a percent, still a very low level, that doesn’t look very dramatic.
“On the other hand, of course, if you’ve got a mortgage and it goes up by half a percent or 1 per cent proportionally that’s a very big increase.
“That could be doubling your mortgage interest payments over a period of time, so even small changes now, at least down the line once people certain fixed rates run through, could have really big effects on people who have got significant mortgages.”