If you’ve got a mortgage or any savings, you may like to keep an eye out for any changes to interest rates. Whether interest rates go up or down, any adjustments can impact your monthly mortgage payments or the amount of interest you receive on savings. So it helps to be in the know.
Interest rates definition
An interest rate is the amount you are charged for borrowing money, and is also the amount you earn when you save with a bank or building society. Interest rates are shown as a percentage of the amount you borrow or save over a year. For example, if you put £100 into a savings account with a 1% interest rate, you’d have £101 a year later (if interest is paid annually and no further deposits, nor withdrawals, are made in that year).
The Bank of England Base Rate is the single most important interest rate in the UK because it influences the lending and savings rates offered by high street banks and building societies. In the news, it may also be called the ‘Bank Rate’, ‘base interest rate’, the ‘interest rate’ or various iterations of these terms. For the purposes of this article, we will refer to this as the ‘Base Rate’.
The confirmed dates for possible changes to the Base Rate are:
- 21 March 2024
- 9 May 2024
- 20 June 2024
- 1 August 2024
- 19 September 2024
- 7 November 2024
- 19 December 2024
What is the Monetary Policy Committee?
The Bank of England’s Monetary Policy Committee (MPC) is responsible for making the decisions about the Base Rate. It meets roughly every six weeks to decide what level the Base Rate should be set at.
How do interest rates affect mortgages?
Although some mortgages are linked to the Base Rate, some are not.
Any changes to the Base Rate will always affect those on a Base Rate tracker mortgage. Those on a variable rate mortgage, or on a lender’s Standard Variable Rate (SVR), may be affected if a lender decides to change its own rate to reflect the Base Rate. This will depend on the lender’s decision.
If you’re on a fixed rate mortgage, your rate will not change.
If you’re not sure what type of mortgage product you have, speak to your lender.
At Suffolk Building Society, when we respond to Base Rate changes, we consider the potential impact on both mortgage borrowers and savings members.
We will always write to mortgage borrowers, informing them of any changes to their mortgage that occur due to fluctuations in the Base Rate or our own Standard Variable Rate. We will also contact them before their current mortgage deal comes to an end, giving them sufficient time to decide which new mortgage product best suits them.
Will interest rates go down in 2024?
We don’t have a crystal ball, so it’s impossible to predict whether the Base Rate, and therefore interest rates, will go up or down. However, it can be useful to understand that rates are affected by factors such as inflation and the Consumer Prices Index (CPI).
If you have any queries or concerns regarding interest rates, contact your mortgage broker or financial adviser. They will advise you on your options, considering potential changes to the Base Rate now and into the future.
Mortgage payment difficulties
If you have a mortgage with us and are concerned about keeping up with mortgage payments, please contact us as soon as you can.
You’re not alone; thousands of mortgage borrowers get help from their lender every year. Talking to us about this will not affect your credit score. We will support you based on your needs and what you can afford to pay.
Call our dedicated team on 01473 278510 or email [email protected]
You can also find details of what support we may be able to offer by visiting this page: Problems Paying Your Mortgage.
