By Ali Hussain, The Sunday Times Money
Thousands of second home owners face paying £1,750 a year more in mortgage repayments after the European Central Bank’s (ECB) rate rise last week – its first increase since July 2008.
The ECB lifted rates to 1.25% from 1%, while the Bank of England held rates at the record low of 1.5% for the 25th consecutive month.
Many will have seen rates rise from an average of 3% to 3.25% last week, according to Simon Gammon of Knight Frank Finance. He said: “A 0.25% point rise may not sound like a big increase, but for many overseas property owners who have enjoyed record low rates, this can be a big shock. Coupled with a less favourable exchange rate, the changes could add more than 10% to the annual cost of your second home.”