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Mortgage borrowers need to be prepared for a rise in monthly payments as interest rates are on the rise.

Some bankers expect mortgage rates could be raised by at least 50 basis points between now and the end of the year.

Consider the example below, and compare how much you may need to pay on top of present instalments.

A 1-percentage-point rise in mortgage rates may cost you an additional Bt690 to Bt3,454 a month for a 30-year home loan of between Bt1-million to Bt5-million.

Let's check how much the instalment payment will go up for a rate rise of 1 per cent.

For example, if you borrow Bt1 million for 30 years with a 7.25-per-cent rate, which is the minimum lending rate (MLR) of big banks today, you would have to pay Bt6,821.76 a month.

If the mortgage rate is 8.25 per cent a year, your instalment will rise to Bt7,512.67, up Bt690.91 a month.

If the instalment period is 20 years with a 7.25-per-cent rate, you have to pay Bt7,903.76 a month for a Bt1-million loan.

If the rate rises to 8.25 per cent, the instalment will be Bt8,520.66, which Bt616.90 more a month.

If you borrow Bt2 million for 30 years with a mortgage rate of 7.25 per cent, you have to pay Bt13,643.53 a month.

If the rate rises to 8.25 per cent, the instalment will be Bt15,025.33, a rise of Bt1,381.80 per month.

This can be applied to mortgages of Bt3-million, Bt4-million and Bt5-million.

If the loan period is 30 years with an interest rate of 7.25 per cent, a rate rise of 1 percentage point will raise monthly payments of these three loans by Bt2,072.71, Bt2,763.61 and Bt3,454.52 respectively.

If the loan period is 20 years and the mortgage rate is adjusted from 7.25 per cent to 8.25 per cent, the instalments for Bt2 million, Bt3 million, Bt4 million, and Bt5 million of mortgage loans will be higher by Bt1,233.79, Bt1,850.69, Bt2,467 and Bt3,084.48, respectively.

The burden that you must take for a 1-percentage-point interest rate rise depends on the loan period and the loan amount.

Say you take out a Bt2-million mortgage with a rate at 7.25 per cent a year, you would pay Bt13,643.53 a month for 30 years.

When you've paid instalments for 10 years, the remaining balance is Bt1,726,207.

The bank increases the mortgage rate by 1 per cent. Therefore, for the remaining 20 years, you must pay off the remaining loan balance with at the new rate of 8.25 per cent a year. Then, monthly instalments will be adjusted to Bt14,708.42, which is higher by Bt1,064.89 a month.

But if the bank increases the mortgage rate after you've paid instalments for 22 years, the remaining balance is Bt991,646.20, which will be used to calculated for the new instalments with the new rate at 8.25 per cent.

Then you must pay Bt14,144.92 a month for the remaining eight years. It is higher by Bt501.39 a month.

You can check these figures by yourselves on bank websites, or ask bank staff to inform you about any adjustment to interest rates.

Websites that can be useful include www.tmbbankproperty.com/calculate.htm, and http://realestate.whosell.com/calculator.html, etc.

Right now banks offer different mortgage rates.

Fixed rate loans are available but also face adjustment. Kasikornbank offers a 1 per cent mortgage rate in the first three months.

Bangkok Bank, Siam City Bank, TMB Bank, Siam Commercial Bank and Krung Thai Bank offer 3.25, 3.99, 3.99, 4 and 4.25 per cent in the first year, respectively.

When the banks need to charge a floating rate for the rest of the deal, the rate will be MLR or MLR minus 0.25 per cent to 0.75 per cent.

But SCB charges the Minimum Retail Rate, currently 7.75 per cent, plus 0.25 per cent.

Right now, the MLR of big and middle-sized banks is 7.25 per cent or 7.5 per cent.