Bank of England puts interest rate up to 3.5%

Today the Monetary Policy Committee has announced a further increase to the Bank of England Base Rate to 3.5%. 

Forecast by many economical experts, the 0.5% rate rise comes as the ninth increase in a row since December last year, when the Government dropped the Base Rate to 0.1% in the wake of the COVID-19 pandemic.

As many industry leaders predicted this latest increase, it has come as no-shock to most and has already been factored into the swap rates. So what will this actually mean for you and your mortgage options going forward?

If you are currently on a Fixed rate mortgage, the increase won’t have any immediate impact on your monthly payments. Also as the increase has already been factored into current swap rates, it shouldn’t impact new fixed rates on offer, something to consider when reviewing your options.

Obviously the increase may have an impact on your mortgage payments if you are on a Variable rate.

If you are on a Tracker mortgage, you should see an increase immediately. If you are on any other Variable rate, your mortgage payments may increase but this will purely depend on what your specific lender decides to do. Either way we strongly recommend that you check with your mortgage provider to confirm.

Although the increase could increase mortgage payments, The Bank of England and some experts are predicting that the measures will further help to stabilise the UK financial markets, support swap rate stability and encourage lenders to offer more competitive rates.

If you think your mortgage will be impacted by today’s announcement or you would like to discuss your current options, you can speak to one of our mortgage specialists to check if you may be eligible for an improved rate. With the market and rates changing on a daily basis, never has it been more important to review your portfolio as further rate increases are forecast for the first half of next year.