Bank of England Rate Increase – What does it mean for you?

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“It’s so important that you know what’s going on out there, so that you don’t just hear the news and hear the Bank of England base rates gone up, but that you understand what that means for you.” – Sarah Tucker

About this episode…

The Bank of England base rate has increased, and lots of people are talking about it going up again, and again. I want to alleviate some of the fear and to explain what the increase means for you.

Read on for a summary or listen in above for the full episode…

Why are we talking about the Bank of England base rate?

In February, 2022, we saw the Bank of England increase their base rate for the second time in three months to 0.5%, as they warned that surging energy bills would push inflation higher than expected to more than 7% by April, and their target is 2%. 

They’ve warned that we might face the biggest fall in our disposable income for three decades this year, and actually, four people out of the nine member committee voted for a more aggressive increase to tackle these rising prices and try and help inflation.

At the time of recording, we’ve had the awful news about Russia and Ukraine, and our hearts are going out to those who are affected by the attacks. It’s absolutely awful to see and hear about, and everything that happens in the world has an effect on our finances. 

What I’m here to do is educate you as much as possible, so that you are as in control as you can be when it comes to your mortgage and your wider finances.

What does the Bank of England rise mean for you? 

If you haven’t got a fixed rate mortgage, you might want to consider getting one. We are being told that rates are going up and we are seeing it happen daily.

Therefore, if you are one of our clients who are currently getting all your paperwork together, you’ll be hearing from us because the rates are going up and we need to get your applications in on time to get you those cheaper rates.

But in essence, the Bank of England base rate going up has seen an increase already in interest rates and we expect it to go up again with four members of the nine member committee voting for a more aggressive increase. So what that suggests is that the base rate is probably going to keep going up. 

Experts have been saying the Bank of England base rate will likely to continue to increase to around 1.2-1.5% by the end of the year. Remember – nobody really knows, these are all forecasts.

Now is a great time to be looking at your remortgage and fixing your rate. 

Five year fixed rates are still very popular and we are seeing a few people ask for those 10 year fixed rates as well. So for some of you, you can give yourself security for really long periods of time. 

We’ve also seen a lot of our clients who have a mortgage deal at the moment, remortgaging early. Be aware that you might have an early repayment charge now and you might have to pay a penalty to leave your current fee fixed rate now, but what we’re seeing is the rates are so good that actually it’s worth people doing it. 

People also know the rates are potentially going to go up, and they’re willing to take that hit now for the greater good. 

So if you have got a mortgage, I would encourage you to have a conversation with us and to really find out if that is a good option. Remember, it’s good to look at all your options.

Our energy bills are going to be going up by 50% in April and again in October.

You might have heard Martin Lewis talking about this a lot. He’s always giving out current, helpful advice and energy bills is the talking point. 

The government is going to be helping us with these increased costs, but the energy price is going up and disposable income, as a result, will come down. And it’s so important that you know what’s going on and that you understand what this means for you. 

What does this mean in mortgage terms?

In mortgage terms, it means that mortgage rates are going up.

Have you got the right deal at the moment and is it worth looking at now? 

If you’re getting a mortgage, you might want to really think about how long you want to fix it for and give yourself that security. Remember – life is unpredictable – but if we can help you try and predict the next two, five and 10 years, which can help you really find out what rate is going to be the best one for you.

When we do your mortgage, we are looking at what your mortgage costs you, but we’re also looking at what your life costs. Can you realistically afford this mortgage and all your bills and the lifestyle you want etc?

That’s also going to come into our conversations because bills are going up. Your outlook is going to be different. So if you don’t track your finances, I would really recommend that you do that so that you can really see the shortfalls and where you can potentially cut back if need to.

If you want to look at your remortgage and fixing your rate via The Mortgage Mum, then please get in touch with a member of our team here.


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