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Interest rates & marketsThe Bank of England base rate and your mortgage: how rate changes hit repayments
The Bank of England's base rate is the interest rate it charges banks, and it sits underneath almost every mortgage, loan and savings rate in the UK. When the Bank's Monetary Policy Committee moves the base rate, the effect ripples out to your monthly repayments — but how fast, and by how much, depends on the type of mortgage you have.
Tracker and variable mortgages: almost immediate
A tracker mortgage is contractually tied to the base rate (for example, "base rate plus 0.75%"), so when the base rate changes, your rate changes within a month or so. A lender's standard variable rate (SVR) isn't formally tied to the base rate, but lenders usually move it in the same direction soon after. If you're on either, a rate change shows up in your payments quickly.
Fixed rates: nothing changes until you remortgage
If you're on a fixed deal, your payments stay exactly the same until the fix ends — that's the point of fixing. The catch comes at the end of the term: you remortgage into whatever rates are available then, which could be higher or lower. This is why the end date of your fix matters as much as the rate itself.
What a rate change costs: per £100,000 borrowed
As a rough guide, on a 25-year repayment mortgage, each 0.25 percentage-point change in your rate changes the monthly payment by roughly £13–£15 per £100,000 of mortgage. So a 1 percentage-point rise adds around £55–£60 a month per £100,000. On a £200,000 mortgage, that's over £110 a month.
| Rate | Monthly payment on £200,000 (25 years) |
|---|---|
| 4% | about £1,056 |
| 5% | about £1,169 |
| 6% | about £1,289 |
These are examples to show the shape of the change, not current market rates. For today's base rate, check the Bank of England website; for real mortgage rates, compare deals or speak to a broker.
What to do
If you're on a tracker or SVR, model what a rate move would do to your budget before it happens. If you're on a fix, note the end date and start comparing options three to six months before it expires. Either way, run your own numbers first.
This article is general information, not financial or mortgage advice. Example figures are illustrative and not current market rates. Check the Bank of England for the current base rate and speak to an FCA-authorised broker before making decisions.