Interest rates rise to 5 per cent

The Bank of England has put up interest rates by 0.25 per cent to 5 per cent.

Homeowners were bracing themselves for the increase which had been widely expected.

The 0.25 per cent rise is likely to cost homeowners with an average £80,000 mortgage just under £13 a month.

If lenders pass on the full hike in rates, monthly repayments on an £80,000 loan will increase from £552.72 to £565.42.

The increase comes as banks announce plans to offer 57-year mortgages to youngsters desperate to get on the housing ladder.

The new deal is offered by the UK’s second biggest mortgage lender, Abbey, while Tesco offers a 52 year deal.

The move has been criticised by experts, with Keith Tondeur of debt advice group Credit Action warning: “Lenders are coming up with more ingenious ways to sustain a house price boom that is not sustainable.”

Interest rates rise to 5 per cent – News – channel4.com

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