The Bank of England has today increased the Base Rate from 3.75% to 4.00%, marking another move in its efforts to manage inflation and maintain economic stability.
What Does This Mean for Mortgage Holders?
The impact will depend on the type of mortgage you have:
Tracker mortgages are likely to see an immediate increase in monthly payments, as these products move in line with the Base Rate.
Variable rate mortgages, including many lender Standard Variable Rates (SVRs), may also rise, although lenders will confirm any changes directly.
Fixed rate mortgages will not be affected during the fixed term. However, if your deal is due to end within the next 6 months, now could be a good time to review your options.
At GDA Financial Partners, we recommend that borrowers approaching the end of a fixed rate start exploring their remortgage or product transfer options early, as securing a new deal in advance can provide greater certainty over future payments.
What About Savers?
Higher interest rates can be good news for savers. Banks and building societies may increase the rates available on:
Easy access savings accounts
Fixed-term bonds
Cash ISAs
However, not all providers pass on rate increases immediately or in full, so it may be worth reviewing your existing accounts to ensure your money is working as hard as possible.
Looking Ahead
While higher rates can put pressure on household budgets, they can also create opportunities for savers. As always, the key is ensuring your mortgage and savings arrangements remain suitable for your circumstances.
If you would like to discuss how today's rate change affects you, whether you're a homeowner, landlord, first-time buyer or saver, the team at GDA Financial Partners is here to help.
This article is for information purposes only and does not constitute financial advice.
