Homeowners could see their mortgage bills rise by around £400 a year following the Bank of England’s decision to raise interest rates, analysis from Experian reveals. The Bank of England’s Monetary Committee has announced it is hiking base rate to 0.75%, the first rise since last November,

The 0.25% rise will see those on Standard Variable Rate (SVR) and tracker mortgages pay around £400 a year extra. A typical standard variable rate deal with a rate of 3.99%, sees borrowers repay £1,513.63 each month, based on a 20-year mortgage worth £250,000.

But a rate rise of 0.25% to 4.24% would push those payments up to £1,546.64, an increase of £33.01 a month or £396.12 a year. A tracker mortgage 2% above Base Rate, rising to 2.75%, would see monthly payments rise from £1,324.76 to £1,355.30. That’s a monthly rise of £30.54 a month – or £366.48 a year.

Analysis of the latest data from Experian’s mortgage comparison service shows a jump in consumers shopping for fixed-term deals. A third (33%) of searches carried out in July were for fixed-term deals, up from 27% in June and 24% in May.

The trend suggests that potential homeowners have been looking to tie themselves into a fixed deal to protect themselves from an increase in interest rates and mortgage payments.

Amir Goshtai, Managing Director, Experian Marketplace & Affinity, said: “The rise in consumers looking at fixed-term mortgages indicates people have been reacting to the speculation of a potential rate rise. If and when there are further rises is yet to be seen, but in the meantime, a priority for homeowners should be to take some simple steps to minimise the future impact on them.

“Getting on top of their financial position, doing some detailed budgeting and understanding their credit score will help them prepare for further rate changes.”

Gillian Guy, Chief Executive of Citizens Advice, said: “Last year 340,000 people came to Citizens Advice for help with their debts. The move could be enough to push more households into the red. Household budgets are increasingly stretched. Our figures show 25% of UK households with a volatile income resorted to credit to pay for essentials such as food and bills. But the £209.4 billion borrowed from commercial lenders only tells half the story, with the extent to which people are behind on their household bills falling under the radar. The government must accurately record this so they can understand the true extent of people’s financial difficulties.

In 2017-18, debt problems related to household bill and government debts made up 47% of all the debt problems Citizens Advice helped people with.