Borrowers on £200k mortgage face forking out £6,700 more

The cost of a two-year fixed-rate mortgage has rocketed to 6.48 percent, compared to just 1.6 percent last autumn. At that price, those who borrow about £200,000 will spend £6,698 more a year than they would have done in September last year.More than a quarter of mortgage holders wouldn’t be able to afford their monthly repayments if they increased by £100 a month, according to new research from Citizens Advice.Nearly half (45 percent) would be unable to make their payments if they rose by £250 a month, the organisation said.Most economists think that the Monetary Policy Committee (MPC) is likely to raise interest rates by 0.75 percentage points to three at the meeting on Thursday.If the Bank of England’s base rate continues to increase, it will likely cost consumers more to borrow than in recent months and years, therefore ‘driving up the monthly amount of their mortgage repayments,’ an expert suggested.READ MORE: Inheritance tax: Forgetting ‘strict rules’ could cost you thousands – how to gift tax-free Mortgage rates are on the rise (Image: GETTY)Richard Eagling, personal finance expert at NerdWallet offers some tips on what consumers may be able to do now.He said: ‘Whether you are a first-time buyer or looking to remortgage, careful consideration needs to be taken when choosing your next deal.’Selected products may not be available whilst lenders assess the wider market and interest rates, so it’s unclear (as ever) when the best time to lock in a deal is.’With around 850,000 borrowers on a tracker mortgage in the UK, a significant number of homeowners may be affected.DON’T MISSCoventry Building Society offers top rates on new savings accounts – up to 4.85% [INSIGHT]Annuities: Fixed-term plans can offer the flexibility of drawdown as rates soar by 45% [INSIGHT]Make a ‘significant difference’ to your retirement – expert shares ‘best place’ for cash [ANALYSIS] As the cost of living crisis continues, any extra cash could be vital for families on low incomes (Image: EXPRESS)If someone has a £250,000 mortgage over 25 years, at the Moneyfacts average mortgage rate of 5.4 percent, and the full rate was passed on, it would mean a rise in monthly mortgage payments from £1,520 to £1,643 – so you would need to find another £123 a month.For anyone whose fixed rate deal has come to an end who decided to revert to the SVR and wait to see what happens to fixed rates, it could end up causing the kind of headaches people may have been trying to avoid.Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown said: ‘For those who are planning to fix their rate, you may face the strange phenomenon of interest rates rising, while mortgage rates remain stable – or even fall.’The mortgage market has been driven most recently by gilt yields, and as they have fallen back, mortgage rates have eased off very slightly.’Given that a 0.75 percent rate is widely expected and therefore priced into the market, it may not change the picture significantly.’The potential closing of the gap between the SVR and fixed rates could persuade some wait-and-see mortgage fixers to pull the trigger – while others may be tempted to hold on to see if a longer period of boring politics and more predictable economics produces slightly lower fixed rates.’