Mortgage News
ONS changes RPI calculations
The Office for National Statistics (ONS) is changing the way in which it calculates Retail Price Inflation (RPI) in attempt to reflect the cost of housing more realistically.
The RPI measures mortgage interest, council tax and certain other housing costs to give a measure of the cost of living.
In the past, the mortgage interest calculation was based on all borrowers paying their lender’s standard variable rate (SVR).
However, the new way of measuring mortgage interest costs relies on data from the Bank of England that covers a weighted average of fixed, tracker, discount, and other mortgages, which it says make up about 90% of the mortgage universe.
The ONS said it made the change because the new rate was more representative of mortgage rates.
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