This comes after the Bank of England’s base rate went up to 4.5 per cent, the highest in 14 years after the 10th consecutive increase since December 2021.
News headlines this morning :(
Shell record profits
BG forced prepay scandal
Water Bills to rise 7.5%
Likely interest rate hikes to hit mortgages
I'm guessing I've got a busy day
— Martin Lewis (@MartinSLewis) February 2, 2023
As the country fights inflation, which is higher in the UK than any other major Western economy, Lewis’s warning is that these rates are unlikely to return to their previous levels.
Those borrowing on mortgages face even further pressures after another rise in rates announced on Thursday February 2.
In order to help bring down the current double-digit inflation, Bank of England decision makers on the Monetary Policy Committee (MPC) have hiked the base rate to 4.5 per cent, a rise of half a percentage point.
Lewis told Andrew Marr on LBC that people should not make any financial judgements on the basis that rates could go back to where they were.
'It is not unusual that the bad activities that are done on behalf of big companies are done by subcontractors.'
Financial journalist @MartinSLewis tells Andrew Marr there are 'lots' of sales firms who 'pretend they don't know' what subcontractors are doing.@AndrewMarr9 pic.twitter.com/U7EVF7tvmv
— LBC (@LBC) February 2, 2023
Martin Lewis on mortgages
Lewis also issued a warning to homeowners who may be affected in a tweet sent out to his 2.1 million Twitter followers.
He warned how the 0.5 percent interest rate rise could affect mortgage holders’ monthly repayments.
“Variable/tracker rate repayment mortgages will rise circa £25 per month (£300 a year) per £100,000 of mortgage. Use a mortgage calculator to check,” he said.
Adding: “Existing fixes won’t change. New fixed rates’ve already been baked in.”
Martin Lewis on savings
Those with a mortgage are not the only ones who should take heed, as Lewis offers advice to savers too.
In a slight glimmer of hope, Lewis explained that top easy access savings accounts were likely to increase their rates soon.
This means those who are able to be savvy with their money and have some savings could get a profitable interest increase from 2.7 per cent to 3 per cent.
But the grim news on interest rates have many worried, with one Twitter using saying: “I can’t believe there is not more being said about people having to find money for nearly three times their mortgage payments. I can’t fix again as I can’t pay the rate (was £375 now £995) and commit to two years. So having to gamble on variable rate and borrow money for now.”
User @70_schick wrote dded: “As an ex-qualified mortgage adviser I was at pains to make customers think very carefully about whether they could afford payments if rates were to rise. Just because you could borrow £X amount didn’t mean you should. The culture of ‘I want, I’ll have’ catching up now.”
“My mortgage interest payments have risen from £80/mth last March to £415/mth in January. Another rise coming for February. How does this help the economy recover? Energy bills up, food bills up, water bills up, earnings as they were in 2010,” added user @NorfolkBroads68.