Bank of England keeps interest rates at 5.25%
Interest rates june
Local property news
21 Jun 2024

Bank of England holds interest rates at 5.25%

What is the Bank of England base rate?

The Bank of England (BoE) sets the base rate, a benchmark for borrowing costs. Mortgage lenders base their rates on it, so when the BoE raises the base rate, borrowing costs increase; when it lowers the rate, borrowing costs decrease.

Currently, the base rate is unchanged at 5.25% for the seventh time, it may be a good time to review your mortgage options.

How does the Bank of England rate affect my mortgage?

If you have a mortgage, you might be closely monitoring the changes in the base rate, as it directly affects your borrowing costs. Mortgage lenders usually adjust their interest rates based on the base rate: increasing them when the base rate goes up, keeping them the same when it stays unchanged, and lowering them when the base rate drops.

Here’s how the base rate decision affects different types of mortgages:

  • Fixed Rate: Your payments won’t change if you have a fixed-rate mortgage.
  • Tracker Rate: Your payments will stay the same for now, as they follow the base rate. But keep in mind, they can go up if the base rate increases in the future.
  • Standard Variable Rate (SVR): Your payments with your current lender might stay the same if they decide not to change the rate. However, this could be a good time to look for better mortgage deals, since you can usually switch without early repayment charges like those on fixed-rate and some tracker mortgages.

What does it mean for landlords?

As a landlord with a tracker or variable rate mortgage, if the base rate remains unchanged, your repayments will typically stay the same as well.

Does the same rate mean that house prices will decrease?

It’s hard to predict exactly. House prices fluctuate based on supply and demand. While we've seen record growth in house prices in recent years, recent higher inflation rates and the increased cost of living have also impacted them.

As a whole, we do feel the housing market is moving in the right direction with more viewings and valuations taking place.

How has the value of my property changed?

If you would like a free valuation of your house, please feel free to contact us. We would be happy to assist you.

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