Mortgages: 715,000 at risk of immediate rise in payments as interest rate rises to 4.25% | Personal Finance | Finance

However, Mr Douglas pointed out: “If you’re having difficulties keeping up with mortgage repayments, get in touch with your lender as soon as possible.

“They’ve been instructed to provide support — be it through offering lower repayments, switching to interest-only, or moving to a different rate — and they’ve already helped over two million customers.

“While contacting your lender won’t affect your credit score, missing payments can. It might make accessing credit more difficult for years to come while putting the best offers out of reach for loans, mobile phone contracts, and car insurance.

“By speaking to your lender at the earliest instant, you could also avoid slipping into mortgage arrears, which could put your house at risk of being repossessed.”

Adrian Anderson, director of property finance specialists, Anderson Harris, described the BoE’s decision as “no gain, just more pain”.

He said: “Mortgage holders hoping that the Bank of England would pause the interest rate rises were dealt a blow yesterday by the surprise leap in inflation to 10.4 percent in February 2023.

“Today’s rate rise to 4.25 percent is consistent with the Bank of England’s plan to battle inflation but it means no gain, just more pain for mortgage holders who are already squeezed.

“This will be particularly challenging for homeowners who have chosen to take a variable rate mortgage in the short-term, in the hope that inflation reduces and they can select a lower longer term fixed rate than what is available now.”