Base rate change and mortgages

About the Bank of England base rate

Find out why the base rate affects your mortgage and use our calculator to see how your monthly payment could be affected.

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

All products that track the Bank of England base rate (including any follow-on tracker rates) have a minimum interest rate. The minimum interest rate that we’ll charge is your current tracker rate. If the Bank of England base rate falls below 0%, we’ll charge the minimum interest rate until the Bank of England base rate rises above 0%.

What is the base rate?

It’s the rate the Bank of England charges other banks and other lenders when they borrow money, and it’s currently 5.25%. The base rate influences the interest rates that many lenders charge for mortgages, loans and other types of credit they offer people. For example, our rates often rise and fall in line with the base rate, but this isn’t guaranteed. You can visit the Bank of England website to find out how it decides the base rate.

Why does the base rate change?

The Bank of England can change the base rate as a means of influencing the UK economy. Lower rates encourage people to spend more, but this can lead to inflation – an increase to living costs as goods become more expensive. Higher rates can have the opposite effect. The Bank of England reviews the base rate 8 times a year. 

Will the rate change affect your mortgage?

Here’s a guide to what will happen and the options you can consider based on the type of mortgage you have. Just remember that if your mortgage payments need to change, we’ll write to you before your next payment date and explain what you need to do.

Fixed-rate mortgage

The change won’t affect your payments immediately, but probably will when your fixed period ends and your mortgage moves to the variable rate shown in your mortgage documents.

Remember that we could offer you a new deal with exclusive rates we reserve just for our customers. You can arrange to switch to a new rate up to 180 days before your fixed-rate period ends.

Tracker mortgage

It’s likely the interest rate you pay will move in line with the base rate change. You’ve got the option of continuing with your current deal or changing to another tracker, fixed or offset mortgage with us.

Offset mortgage

Our offset mortgages track the base rate so it’s likely your payments will change. But you’re also using your savings to reduce the mortgage balance we charge interest on, so the more you offset the less impact a change to the base rate would have on you.

Standard variable rate

We'll write to you if your payments are going to change. Remember that our standard variable rate can change at any time, including when the base rate changes.

Buy-to-let mortgage

Your buy-to-let mortgage could be a tracker or a fixed rate, so check your documents and then follow the information we’ve provided above.  

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Exclusive mortgage rates for existing customers

Switch to a new rate if you have a mortgage with us

If you have a mortgage with us, we can offer you exclusive rates if you want to switch to a new deal – and you could borrow more

You can also check our full mortgage range [PDF, 286KB] to see if our other mortgages are suitable for you, download our tariff of mortgage charges [PDF, 265KB] and read our legal information.