Mortgage Market News

The UK sees first Base Rate rise in 10 years

So, it’s happened… The first base rate increase in 10 years. At midday today, the Bank of England announced that it would be increasing the base rate to 0.5%, after a vote of 7-2 in favour of a rate rise. This decision follows much speculation amongst market commentators of a rate rise, after Mark Carney commented, in October, that the majority of the Monetary Policy Committee saw a rate rise as appropriate.1

Why has the base rate risen?
The UK economy has weathered the Brexit storm better than expected.2 Inflation hit three per cent in September – its highest level in more than five years3. The policy dilemma which faced Britain’s central bank, and influenced today’s decision, was how to balance surging inflation against an economic slowdown, post UK referendum4. The base rate was increased with the aim of counteracting rising inflation safeguarding the UK economy. Carney hopes that increasing the base rate will also protect consumers and reduce risky mortgage debt.5

How might the base rate rise affect your mortgage?
As you may have read in our previous Best Buy email, we have already seen some of the most significant mortgage lenders in the UK raise their mortgage interest rates. UK lenders including Barclays, NatWest, Nationwide, Halifax and a handful of other banks and building societies, have upped their rates in line with climbing swap rates, ahead of the base rate rise.

  • Tracker mortgages – For anyone with a base rate tracker mortgage, your monthly mortgage repayments will rise as of next month.
  • Variable rate mortgages – We may see rates start to fall, despite the rise in the base rate, as lenders may become less risk-averse with a higher base rate to fall back on.

  • Fixed rate mortgages – In the short term, those on a fixed rate mortgage can be safe in the knowledge that their monthly mortgage repayments will remain unaffected. Once the initial period has come to an end, however, higher mortgage rates may apply.
  • Savers – With a base rate rise, you will see interest on your savings increase.

If you would like to remortgage or discuss your circumstances, please call us on 0207 519 4985. Alternatively, you can send us an email to speak to one of our experienced Mortgage Managers.

Your home may be repossessed if you do not keep up repayments on your mortgage.

You may have to pay an early repayment charge to your existing lender if you remortgage.


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Your home or property may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it. Changes in the exchange rate may increase the sterling equivalent of your debt. You may have to pay an early repayment charge to your existing lender if you remortgage. Think carefully before securing any other debts against your home. is a trading name of Ltd, Aegon House, Ground Floor Suite, 13 Lanark Square, London, E14 9QD authorised and regulated by the Financial Conduct Authority (FCA). Our FCA registration number is 302228 and can be viewed by visiting the FCA website: The FCA does not regulate tax advice or some aspects of commercial, buy to let, overseas mortgages, bridging finance, finance and asset lending. Ltd is a licensed credit broker, and not a lender. Limited is registered with the Guernsey Financial Services Commission, reference number: 2269418, as a Non-Regulated Financial Services Business. Ltd Registered in England and Wales No: 5070990 Registered Address: As above. The guidance and advice contained within the website are subject to the UK regulatory regime and is primarily targeted at UK customers. Calls may be recorded for training and monitoring.