Expert warns Bank of England interest rate rise will affect more than a million homeowners

The Bank of England has once again made the decision to raise interest rates, with the base rate now at 4.25 percent. The decision was made by the Monetary Policy Committee today (March 23) who voted by a majority of 7-2.

This is now the 11th consecutive time that the Bank has chosen to hike interest rates in the hopes of controlling inflation. The last announcement in February this year saw the base rate rise to 4 percent, which has now gone up by another 0.25 percent.

The base rate of 4.25 percent is now the highest level the UK has seen since October 2008. The increased rate is likely to cause concern amongst homeowners, as experts have now warned that more than a million mortgage holders are likely to be affected.

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The Bank's interest rates have a direct affect on those who own a property, and how much you are impacted depends on which type of mortgage you have.

Experts warn that it is homeowners who are on a tracker and variable rate mortgage who will be worst hit by the increased rate, as they must be prepared for their monthly repayments to go up.

David Hannah, property expert of Cornerstone Tax, explained: "The rate was already at its highest level for 14 years and now the impact of this rate rise is set to be felt by borrowers as mortgage and loan costs are set to be higher.

"When interest rates rise, around 1.6 million people on tracker and variable rate deals will see an immediate increase in their monthly payments.

"The increase of 0.25 percentage points today means that homeowners on a typical tracker mortgage would pay around £24 more a month as those on standard variable rate mortgages face a £15 increase."