Base Rate increases to 1.75%

 The Bank of England has announced a further base rate increase to 1.75% from 1.25%, the biggest single rate increase since 1995, but what does this mean for landlords and mortgage rates? 

This most recent increase of 0.5% comes as part of the Government’s ongoing effects to dampen soaring inflation levels, currently at 9.4%*. Further forecasting that inflation levels could continue to rise to a staggering 13%, as well as a recession, the Bank of England initiated the base rate increase in a bid to combat this. 

Obviously, any changes to the base rate can impact any form of borrowing including mortgage rates (unless currently on a fixed basis), so being aware of any fluctuations is important, especially if a portfolio landlord. So here are a couple of things to keep in mind: 

• If you are on a fixed rate, your monthly payments shouldn’t be immediately impacted but if your fixed period is due to end very soon, and with rates changing so rapidly already, it may be worth considering your options now. 
• If you are on a tracker mortgage or SVR rate, your monthly payments are likely to increase, but with a quick chat with one of our brokers, you can check whether you are able to switch to a better deal.

When considering any new rate, it is important to keep in mind any Early Repayment Charges (ERC) that may be applicable, but we will explore all options for you before recommending any new deal. 

As most lenders are still to announce any changes in light of the base rate hike, it is impossible to say exactly what the increase will mean but with senior contacts in most of our lenders, the team are working tirelessly to ensure you get up-to-date information and are here if you have any questions at all.  

*correct at the time of writing – 05/08/22