Martin Lewis: what Money Saving Expert said about mortgage rates and savings as interest rate increases

Homeowners across the UK are facing rising mortgage bills following the interest rate increase, money expert Martin Lewis has warned.

The Bank of England today (22 September) announced that interest rates have risen from 1.75% to 2.25%, the highest base rate since November 2008 when the global financial crisis was at its peak. The Bank of England also warned that the UK may already be in the midst of a recession.

ITV’s money-saving expert Martin Lewis has now told homeowners how the interest rate jump could affect their bills. Here’s everything you need to know.

What did Martin Lewis say about mortgage rates?

Updating his loyal followers on the latest news, Lewis said homeowners may expect a £40 increase in bills per month. He gave the warning while appearing on Good Morning Britain to speak about the interest rate increase.

He said: “There is very very little hope interest rates could fall. The current UK interest rate is 1.75%, that is likely to be going up to about 2.25% or 2.5%.

“It will add around £40 per month per £100,000 outstanding on your mortgage. We are hearing interest rates could rise even higher in the next year.”

Lewis also gave his advice on which type of mortgage prospective homeowners should go for if buying property at the moment. He explained that fixed rate mortgages do not change until they end, with the new fixed rate likely to be much more expensive.

What did Martin Lewis say about savings?

Alongside his advice about mortgages, Lewis also gave his expert opinion on savings accounts amid the interest rate rise. He warned that the rising rate may not be passed on to customers, and customers should be prepared to switch.

He added: “The key is the top rate and top fixes will go up. So wait a day or two for new rate to be factored in, then check your savings, and if it is cr*p ditch and switch. Full best buys in.”