The Bank of England voted today to maintain the base rate of interest at its current level of 5.75 per cent.

Homeowners could be facing reduced affordability in light of the interest rates, which remain at their highest level since March 2001.

Figures from the Council of Mortgage Lenders (CML) highlight the issue by estimating the impact of the rate decision on the typical mortgage.

According to the industry body, the average first-time buyer mortgage is currently for almost £120,000.

By decreasing interest rates by 0.25 per cent, the monthly cost of a repayment mortgage for that amount could be lowered by £18.41, the council estimates.

And interest-only mortgages could be made £25 cheaper each month by a quarter-point decrease in rates.

Households looking to fund their way through short-term financial difficulty could opt for a homeowner loan as a means of providing money which can be paid back gradually.

The situation for home movers could be worse, according to the CML, as the typical mortgage here is for nearly £140,000.

For those individuals, monthly mortgage costs could be up to £29.17 greater without a quarter-point reduction in the base rate.

But homeowner loans could be a solution, unlocking equity held in property to offer a way of surviving elevated expenditure in the short term.ADNFCR-1287-ID-18348430-ADNFCR

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