Base Rate Predicted to Rise to 0.5% 31 January 2022 at 3:14PM in Mortgages & endowments 18 replies 1.7K views

Former_MSE_James_F

The Bank of England is expected to increase base rate to 0.5% from 0.25% on Thursday as the cost of living continues to rise. The rate is used by the central bank to charge other banks and lenders when they borrow money – and influences what borrowers pay and savers earn. 

Read the full story here:
'Bank of England set to increase interest rates this week - what a rise could mean for you'

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dunstonh

At least you haven't gone all Daily Mail on us and said they are going to skyrocket by 50%.

julicorn

dunstonh said:

At least you haven't gone all Daily Mail on us and said they are going to skyrocket by 50%.

0.25% -> 0.5% would mean a 100% increase - but then again, people get very confused by things going up 100%, or even more than that (god forbid, surely that's mathematically impossible! /s)

getmore4less

julicorn said:

dunstonh said:

At least you haven't gone all Daily Mail on us and said they are going to skyrocket by 50%.

0.25% -> 0.5% would mean a 100% increase - but then again, people get very confused by things going up 100%, or even more than that (god forbid, surely that's mathematically impossible! /s)

0.25% ->0.75%

propertyhunter

Lenders have already factored this into their deals. I had a quote for a 5-year fix at 0.99% in September and now its 1.44% in January. 

Windofchange

Yeah we're in the process of remortgaging now and the deal we were looked at 2 weeks ago was 1.64% and on application it was 1.74%, so agreed that they have already factored this in. 

Thrugelmir

propertyhunter said:

Lenders have already factored this into their deals. I had a quote for a 5-year fix at 0.99% in September and now its 1.44% in January. 

Will already be paying higher borrowing rates on the commercial markets. Estimations of how many times the FED will increase base rate , starting in March, in the USA differ between 4 and 7/8. For once even the markets have no broad concensus. Ripples will be felt across the pond. 

Broadsword66

The 1.4% 12 month fix from Union Bank of India has a minimum investment of £5,000, not £1,000 as reported, and as also quoted in some parts of the bank's website.  I tried to apply for it today with a £2,000 invest: no good. Doesn't give me confidence in the bank, either!

kulostwo

 let's hope it will increase tenfold!   we need good saving rates

Silvertabby

Many people will have overstretched themselves, despite the stress test.

Niece and her husband, as first time buyers, bought a new build 4 bed/2 bath/study 5 years ago with the maximum help-to-buy loan and the rest of the deposit from the bank of mum and dad.

5 years, 2 children and 2 new car loan repayments later, the help to buy loan payments have just kicked in and even if they remortgage to cover it, seems they hadn't budgetted for a higher mortgage AND a rate rise.

Sis-in-law has been dropping big hints about us giving our niece her inheritance now, when she really needs it (ie, we take out some form of equity release, as they did to raise the deposit) but as we are only in our 60s that isn't going to happen.

Sadly, my niece and her family won't be the only ones in this situation.

Thrugelmir

Silvertabby said:

Many people will have overstretched themselves, despite the stress test.

Niece and her husband, as first time buyers, bought a new build 4 bed/2 bath/study 5 years ago with the maximum help-to-buy loan and the rest of the deposit from the bank of mum and dad.

5 years, 2 children and 2 new car loan repayments later, the help to buy loan payments have just kicked in and even if they remortgage to cover it, seems they hadn't budgetted for a higher mortgage AND a rate rise.

Sis-in-law has been dropping big hints about us giving our niece her inheritance now, when she really needs it (ie, we take out some form of equity release, as they did to raise the deposit) but as we are only in our 60s that isn't going to happen.

Sadly, my niece and her family won't be the only ones in this situation.

We all have choices as to how we manage our money. The property will have increased considerably in value and they will have paid off some of the mortgage. As a consequence are far from being in financial difficulty.