Biggest interest rate increase in 33 years

Going up

The rise of 0.75 percentage points, an eighth consecutive increase and the biggest since 1989, has a significant impact on borrowers. Future rate rises are still anticipated at the next MPC meeting on 15 December and until the end of 2023 – so there could be more pain to come.

To fix?

If you’re on a fixed-rate deal that is due to expire, the options might look drastically worse than last time you remortgaged. Fixed-rate mortgages have the advantage of sheltering you from future rate hikes, though the new deals might not seem like much of a respite. Indeed, the average five-year fixed rate is currently 5.95%, lower than the rates seen throughout October but significantly higher than a year ago.

Or not to fix?

The average Standard Variable Rate (SVR), meanwhile, is 5.86%. An SVR is the rate to which you’ll default when a deal comes to an end and, unlike a fixed rate, it changes along with Bank Rate. As such, these rates are likely to keep rising for the next year.

As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments.