Interest rates LIVE: Bank of England to make ‘knife-edge’ decision | Personal Finance | Finance

If interest rates rise, borrowing could become more expensive for you. Whether you are looking to get a mortgage to buy a house, or a new car on credit, it’s crucial to think about what higher costs mean for you.

Imagine you have a £130,000 mortgage that you want to pay off over 25 years. If the interest rate on the mortgage is 2.5%, the monthly repayment will be £583.

But if the interest rate is 1% higher, the monthly repayment will be higher, at £651.

Of course, interest rates can go down as well as up. If the mortgage interest rate was 1% lower, the monthly repayment would be around £520.

It’s very important that you understand how a change in interest rates could impact your ability to pay.