Mortgage rates: How 1% can hit your finances for the rest of your life

Just a small percentage rise can have a lasting knock-on effect, say experts

Homeowners face hikes to mortgage payments (PA)

The Bank of England increasing its base rate is predicted to have a “big impact” on households who might need to pay hundreds more per month to maintain their mortgage - experts have said.

On Thursday, the bank increased its base rate from 4.25 per cent to 4.5 per cent, the 12th rise in just over a year to put it at the highest levels since the 2008 financial crash.

The base rate is used by the BoE in how they charge other banks when they borrow money and it has a knock-on effect for what borrowers pay and savers earn and even a rise of 1 per cent could have huge consequences, insiders have warned the Independent.