This month interest rates were raised from 0.5% to 0.75% - but how will this rise affect homeowners and buyers? Here, we tell you everything you need to know.
What has happened?
The Bank of England raised interest rates by 0.25%, from 0.5% to 0.75%, earlier this month.
This means that interest rates are now at their highest since March 2009 - though they are still very low by historical standards.
I am saving up a deposit for my first home - will this increase help me?
The increase is positive news for savers in theory - however, how much you will benefit will depend on the account or accounts which you hold your savings in.
So far, only the Beverley Building Society has passed on the full 0.25% increase to savers, while it has been reported that Nationwide and TSB will only pass a 0.1% increase to its customers.
This could be a good chance to shop around to see who has the best deals, so why not take a look at our blog on the best savings accounts for first time buyers .
I have a variable rate mortgage - will my repayments increase?
For those with a variable rate mortgage, it’s likely that most mortgage lenders will pass on this month’s rise, meaning these homeowners will pay more each month.
Likewise, those on a tracker mortgage - which tracks the Bank of England's base rate - will see their repayments increase.
Nationwide figures show a homeowner with £250,000 mortgage will see an annual increase of £374 – a rise of £31 in their monthly repayments.
I have a fixed rate mortgage - am I safe from any hikes in my repayments?
If you’re one of the 4.7 million households with a fixed-rate mortgage, then good news! You won’t be forking out any extra pennies in the immediate future.
Of course, when you come to the end of your current fixed rate term you might find that your monthly repayments increase slightly on a new fixed rate deal.
If you’re approaching the end of your fixed rate mortgage, check out money.co.uk’s mortgage comparison tool.
Will interest rates rise again in the near future?
This month's rate rise has inevitably led to speculation about when the next increase will be.
Although much will depend on how the economy performs, the Bank of England has indicated that any future increases will be "limited and gradual."
By the Bank's own projections, the base rate would not reach 1.5% until 2021, and most experts are predicting that there will be no further hike until the middle of next year.