The impact of interest rises on mortgage payments

Homeowners have been advised about how a rise in the Bank of England base rate will affect monthly mortgage payments.

Jasmine Birtles, founder of financial advice website moneymagpie.com, said that people on different types of home loan will see specific changes in the mortgage rates.

"If you have a tracker mortgage then obviously it's going to go up because it tracks the base rate," she explained.

However, she said those on a standard variable home loan are facing less clear-cut changes, noting that while an increase mortgage rates is likely, it is more dependant on the opinions of how much of the rise lenders want to pass on.

Homeowners on a fixed mortgage rate and those nearing the top of a capped loan are unlikely to see any difference.

"I don't see interest rates going up until at least the summer, possibly towards the end of the year, so I don't think there is an imminent danger of this," Ms Birtles added.

A number of mortgage lenders, including Kensington and Nationwide, have recently announced a reduction in rates in order to make their home loans more competitive. 

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2011-04-19 13:05:22 © Moneyextra.com