On Thursday 22nd September, the Bank of England’s Monetary Policy Committee (MPC) announced it was to raise the Bank Rate by 0.5 percentage points to 2.25%, but what does this mean for mortgages?
What is the Bank Rate? The Bank Rate, sometimes referred to as the Base Rate, is the most important interest rate in the UK. Set by the MPC, the Bank Rate is highly influential in guiding lenders in setting their own interest rates (on both loans and savings products).
What does this mean for my mortgage? If you have a fixed-rate mortgage, you’re shielded from the upheaval for the time being. However, if you’re on a variable rate, you will see changes to your repayments. If you have a tracker mortgage, your interest rate directly follows the Bank Rate, so in this case goes up. If you have a Standard Variable Rate (SVR) mortgage, it could be influenced by the changes to the Base Rate, but it is not a given (as it is with a tracker mortgage).
We spoke to Conor Murphy, Smartr365 Founder and CEO, to learn more.
“The domino-effect of the Bank of England’s base rate decisions has been a hot topic of conversation throughout 2022. Today sees what has become somewhat of an established trajectory continue, with a 0.5% rise announced this morning.
“The property market continues to withstand these ongoing rate rises, proving its resilience despite wider economic challenges. However, with ongoing economic uncertainty, many more homeowners will likely be looking to lock in rates before any further potential rises.
“In this climate, enabling a stress-free and efficient mortgage journey is an increasing priority. Platforms that ensure a swift and seamless end-to-end experience are crucial to helping brokers to support those who need it most this autumn.”
To learn why we’re the platform of choice for over 3,500 UK brokers, book your demo today.