Monthly repayments increase for first time buyers in Wales

Peter Griffiths, chief executive of Principality Building Society, said: “This latest rate rise from the Monetary Policy Committee (MPC) to 5.75% is clearly a reaction to inflationary pressures.

“This is the fifth rate rise in almost a year and it will certainly take its toll on homeowners – with at least one further rate rise likely before the end of the year.

“The average first time buyer in Wales has a mortgage of almost £100,000 and, unless they are protected by a fixed rate deal, they will see between £15 and £20 a month added onto repayments. However, given that there have been five interest rate rises since last August - adding 1.25% to borrowing costs - monthly mortgage repayments for many first time buyers will have increased by around £100.

“The people who will have the biggest shock are those who are coming to the end of a fixed rate mortgage to be faced with a 1.25% jump in monthly repayments. However, we are advising people not to panic but to look at how it will affect their finances. They can seek advice from a mortgage advisor who will help them to consider their options and possibly reduce their mortgage repayments.

“There are early indications that the housing market in Wales is responding to the previous four rate rises with house price inflation at around 5-6% and we expect further cooling in the market over the summer and into the autumn.

“The rate rise is good news for savers, with interest rates on savings at their highest in six years.”