Bank of England raises Base Rate to 13 year high
5th May 2022
The Bank of England has increased it’s base rate from 0.75% to 1%. We look at the impact this could have on mortgage borrowers in the UK
As expected, the Bank of England has increased the ‘Bank Rate’ by 0.25% to 1%.
This is the fourth increase to the base rate since December 2021 and is the highest the rate has been in 13 years.
The ‘Bank Rate’, more commonly known as the ‘Base Rate’ is the interest rate that the Bank of England charges commercial banks for loans.
As lenders are charged a higher rate for their money, the biggest impact will be felt by the homeowners who are currently on variable rate mortgages, who are likely to see their repayments increase almost instantly.
Borrowers who were in the process of applying for a mortgage may now find that the product they had chosen is no longer available or has been replaced by a product with a higher rate of interest.
Those who have a fixed-rate product which is due to end soon may want to enquire early in case there is an option for them to secure a new product before their current deal ends.
Whatever your financial situation, now is the time for carefully planning to ensure you are not left out of pocket.
Concerned about rate rises?
You may have no cause for concern, but if you find yourself worrying about this news then please get in touch and we will help you better understand the implications this rate increase may have on your mortgage.
For a free rate review, click the button below and book an appointment.
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