We’ve just had the news that interest rates are remaining unchanged at 5.25% – a 16-year high.Here’s a reminder of how high interest rates affect us.Mortgage holders with variable or tracker mortgages, or who are looking to secure new fixed-rate deals, have higher monthly payments.First-time home buyers may find they are priced out of the market as lending conditions become tighter.Charges tend to be higher for some loans and credit cards that don’t have fixed interest charges.People with savings should benefit from higher interest rates and get better returns on their money, but banks are not always quick to pass this onto their customers.Higher rates could also be good news for those on the cusp of retirement, who might get a better annuity rate. This determines how much guaranteed income you get, when you swap some or all of your pension pot for a secure income. That’s because providers typically buy government bonds, which will rise in line with higher interest rates.For the government though, rises in interest rates in recent times means it has had to pay more interest on the country’s debt.



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