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

MSE_Emily

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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london21

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. 

4littleone

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rate fixed at 4.4 % for 5 years as of Friday last week, I've had a call from my broker today that the product is now withdrawn and they are only offering a 2 yr fixed at 5.64%.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.

london21

4littleone 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rate fixed at 4.4 % for 5 years as of Friday last week, I've had a call from my broker today that the product is now withdrawn and they are only offering a 2 yr fixed at 5.64%.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.

Does not seem right, i thought once full application as been made the rate is secured?

Is it a mainstream lender

snowqueen555

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_S

4littleone 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rate fixed at 4.4 % for 5 years as of Friday last week, I've had a call from my broker today that the product is now withdrawn and they are only offering a 2 yr fixed at 5.64%.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.

RM_2013

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

4littleone

K_S said:

4littleone 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!!

K_S

4littleone said:

K_S said:

4littleone 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!

Filo25

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

MattMattMattUK

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.