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Understanding the Bank of England Base Rate

Here’s everything you should know about the Bank of England Base Rate, how it affects you and what to do when it changes.

What is the Bank of England Base Rate?

This is the interest rate the Bank of England charges on money lent to financial institutions – like us. The Bank of England’s Monetary Policy Committee generally meets once a month and reviews this rate.

Why does it matter to me?

Any change in the Base Rate can influence the rates of existing or new products from us and other providers. This is because the cost of providing some products is directly linked to the Base Rate.

What does a Base Rate change mean to my mortgage rate?

Not all mortgage rates are impacted by a change to the Base Rate. Only our Tracker Mortgage is directly linked to the Base Rate – so your interest, and monthly payments, will go up or down in line with the Base Rate.

If you’re on a Fixed Rate, your interest rate won’t change until the end of the fixed rate period. You can contact us up to six months before the end of the fixed rate period to discuss your options.

Will your Standard Variable Rate change?

Our Standard Variable Rate isn’t directly linked to the Base Rate, but it is likely to change if the Base Rate does – any customers affected by this will be notified by letter and/or email.

How will a change affect me if I have a first direct mortgage interest rate guarantee?

Customers who opened a first direct Offset Mortgage before 1 January 2005 or took any Offset Mortgage additional borrowing prior to 11 May 2009 received a guarantee that their interest rate would not rise by more than 1% above the Bank of England Base Rate for the life of the loan.

What do I need to do if the Bank of England Base Rate changes?

If you have products which are affected by a change in the base rate, we'll always write to let you know what, if anything, you have to do.

When will the new rates come into effect following the Bank of England Base Rate change, and when will I see a change in my payments?

As mortgage interest is calculated daily, Tracker rates will change on the day of a change to the Bank of England Base Rate, this will be reflected in the next payment taken following the change if the process to take your payment has not already started in our system. If it has, the rate change will take effect from the subsequent payment.

What does the Bank of England Base Rate do to my savings?

We don’t currently offer savings products directly linked to a Bank of England Base Rate, but we constantly review our products and will notify customers of any changes to their products.

Find the mortgage for you

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.

How interest rate changes could affect your mortgage

If you have a Standard Variable or Tracker Mortgage, your interest rate – and so your monthly payments – could go up as well as down.

Have a play with our Interest Rate Change Calculator to see how rate changes might affect what you pay.