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What does Bank of England rate rise mean for you?

Some people could see a change to their mortgage interest rate.

You could see a change to your mortgage rate after The Bank of England increased the base rate to 0.5%.

This latest rise from 0.25% comes in response to increased inflationary pressures and came into force on February 3rd.

The Bank of England said the move was to help push inflation back down to its 2% target.

It marks the central bank's first back-to-back increase since June 2004, after it lifted rates from 0.1% to 0.25% in December 2021.

I have a mortgage. What does this mean for me?

It depends which kind of mortgage you have.

According to UK Finance, 74% of all current mortgages are fixed, meaning for the vast of majority of mortgage-holders, nothing will change.

Lenders might raise standard variable rate (SVR) or 'discount' mortgages.

On a tracker mortgage? Rates will increase. As the name suggests, these 'track' the base rate, so mortgage costs will go up.

Expert opinion:

Broadland Consultants Limited, independent financial and mortgage advisers in Norfolk, said the jump in the base rate is likely to put pressure on some lenders to increase mortgage rates.

However, some lenders in the mortgage market had anticipated this latest increase, and this had been priced into the financial markets that dictate the price of many mortgage deals.

Representatives of major mortgage lenders in the UK also pointed out that the mortgage market still remains competitive, with a number of attractive deals still on the market.

It is not expected to dampen demand for mortgage products, particularly in the short term.

Broadland Consultants added: "For property buyers who had not yet locked into a competitive rate, the increase in the base rate will come as disappointing news, however, lenders are still launching attractive deals onto the market, so anyone who is still debating on whether to fix may be wise to do so now, and for some buyers a longer-term fixed rate may now be a more attractive option.

"As always, Broadland Consultants’ expert mortgage advisers are here to help and support your clients research the whole of the market and secure them the best possible mortgage deal."

Sowerbys works closely with Broadland Consultants - a helpful video about the service can be 
viewed here.