Bank of England increases base rate to 2.25% – what the rise means for your mortgage and savings

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The Bank of England has increased the base rate to 2.25% from 1.75%. This 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...

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Bank of England increases base rate to 2.25% – what the rise means for your mortgage and savings

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  • london21london21 Forumite
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    The banks don't always pass the rates to savers.

    Personally, will be fixing my mortgage for 5 years.

    Will invest my savings by diversifying between property and funds. 
  • 4littleone4littleone Forumite
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    I had a full mortgage application in and rate fixed at 4.4 % for 5 years as of Friday last week, I've had a call from my broker today that the product is now withdrawn and they are only offering a 2 yr fixed at 5.64%.
    I didn't think they could do that once an application was with the lender but sadly, it seems I was wrong.
    Total debt at LB Moment (Nov 2007) = £6583 £4649 20.03.09
    £5060 Black horse Loan - £4114 as of 20.03.09
    £940 o/d with hsbc - -£535 as of 20.03.09
  • london21london21 Forumite
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    I had a full mortgage application in and rate fixed at 4.4 % for 5 years as of Friday last week, I've had a call from my broker today that the product is now withdrawn and they are only offering a 2 yr fixed at 5.64%.
    I didn't think they could do that once an application was with the lender but sadly, it seems I was wrong.
    Does not seem right, i thought once full application as been made the rate is secured?

    Is it a mainstream lender
  • snowqueen555snowqueen555 Forumite
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    Yeah worried also, waiting to hear back on an offer and based on that will apply asap for a mortgage. 

    Fro what I've read in the news, some banks have preemptively risen them already earlier this week, so hoping they won't all necessarily rise again.
  • K_SK_S Forumite, Ambassador
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    I had a full mortgage application in and rate fixed at 4.4 % for 5 years as of Friday last week, I've had a call from my broker today that the product is now withdrawn and they are only offering a 2 yr fixed at 5.64%.
    I didn't think they could do that once an application was with the lender but sadly, it seems I was wrong.
    @4littleone Which lender is this and when was the full application submitted? It's never happened to any of my applications for clients and I would think it very very unlikely that a mainstream lender would decline to honour a rate for which a full application had already been submitted.

    I can see it potentially with one of the smaller building societies or a small specialist lender, but not with a mainstream one.

    I’m a Forum Ambassador and I support the Forum Team on the 'Mortgages & Endowments', 'House Buying, Renting & Selling' and 'Mortgage-free Wannabe' boards. If you need any help on these boards, do let me know.

    Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing [email protected]. All views are my own and not the official line of MoneySavingExpert.

    ------------------------------------------------------------------------------

    I am a Mortgage Adviser - You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.

  • RM_2013RM_2013 Forumite
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    Our mortgage will go up again as due to previous financial problems and debt we ended up with some of our mortgage on interest only. However we have a lot of equity in the house so we are currently selling and we will pay off our mortgage and all our debts and start again with a repayment mortgage on new property.  Our mortgage has been approved and we have a mortgage offer in place until 1sr mar so Lee. To get things moving with solicitors etc
  • 4littleone4littleone Forumite
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    K_S said:
    I had a full mortgage application in and rate fixed at 4.4 % for 5 years as of Friday last week, I've had a call from my broker today that the product is now withdrawn and they are only offering a 2 yr fixed at 5.64%.
    I didn't think they could do that once an application was with the lender but sadly, it seems I was wrong.
    @4littleone Which lender is this and when was the full application submitted? It's never happened to any of my applications for clients and I would think it very very unlikely that a mainstream lender would decline to honour a rate for which a full application had already been submitted.

    I can see it potentially with one of the smaller building societies or a small specialist lender, but not with a mainstream one.
    Hi, it's Kent Reliance, full application went in on Friday. I was told the product is now withdrawn from the market. I'm self employed if that makes a difference? First timer so I know nothing!!
    Total debt at LB Moment (Nov 2007) = £6583 £4649 20.03.09
    £5060 Black horse Loan - £4114 as of 20.03.09
    £940 o/d with hsbc - -£535 as of 20.03.09
  • K_SK_S Forumite, Ambassador
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    K_S said:
    I had a full mortgage application in and rate fixed at 4.4 % for 5 years as of Friday last week, I've had a call from my broker today that the product is now withdrawn and they are only offering a 2 yr fixed at 5.64%.
    I didn't think they could do that once an application was with the lender but sadly, it seems I was wrong.
    @4littleone Which lender is this and when was the full application submitted? It's never happened to any of my applications for clients and I would think it very very unlikely that a mainstream lender would decline to honour a rate for which a full application had already been submitted.

    I can see it potentially with one of the smaller building societies or a small specialist lender, but not with a mainstream one.
    Hi, it's Kent Reliance, full application went in on Friday. I was told the product is now withdrawn from the market. I'm self employed if that makes a difference? First timer so I know nothing!!
    @4littleone Ah that's a stroke of bad luck. I have anecdotally heard about KR doing something similar. Most of these smaller lenders are really struggling with securing funding lines so they're quite sensitive to changes in their funding costs. I hope your broker is able to sort out something that works for you. Good luck!

    I’m a Forum Ambassador and I support the Forum Team on the 'Mortgages & Endowments', 'House Buying, Renting & Selling' and 'Mortgage-free Wannabe' boards. If you need any help on these boards, do let me know.

    Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing [email protected]. All views are my own and not the official line of MoneySavingExpert.

    ------------------------------------------------------------------------------

    I am a Mortgage Adviser - You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.

  • Filo25Filo25 Forumite
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    A lot of mortgage rates will be getting pulled after today's mini-budget, expectations for future rate rises is now going up.

    0.75-1.00% increase in November seems likely now
  • MattMattMattUKMattMattMattUK Forumite
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    I am not worried about the rise to 2.25%, but I am worried that they will likely be somewhere between four and five percent by the end of next year. That is likely to suck £80-100 billion out of the economy, so more than the energy bill rise would have, it is going to be disastrous for the wider economy, let alone individual circumstances.

    When interest rates were at 15% in the last things were very different, the average mortgage borrowing was 1.3 times average income and generally people were borrowing about two times their income when they started out, now the average mortgage borrowing 3.2 times average income an people have to borrow 4-5 times their income to initially get on the property ladder. The idea that we can have economic growth with huge amounts being sucked out by mortgage interest is farcical, 0.1% was too low, but equally anything over 3% will cripple the economy and extend the recession, as well as making a lot of people's lives harder for no benefit overall. 
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