Will BOE interest rate rise just go on top of the mortgage rises in preparation?

Amolta

The interest rates have already gone up by about 1.5% presumably in preparation for interest rate hike from the BOE. So, my probably stupid question is, when that rate increase happens, are we just gonna see that on top of the increases that have already happened? Or will they adjust with the fact they have already increased? 


I ask as I am one of many trying to figure out if we should pay an ERC. We have no choice but to stay with nationwide as we have two products with different terms for our house. We can lock in for free from Dec 1st and keep our low rate until April. If a rate increase has already been factored in, it prob somewhat swallows up the costs of moving now. If the BOE is just going to be on top, (eg BOE put it up 1.5% and real terms moratges go up 3%), then we seriously need to think about paying up the difference and moving.

This may be a very basic question, but I appreciate anybody who can help me understand as it helps me understand the risks.

kingstreet

I suspect another base rate rise has already been factored-in by the money market which provides the rate swaps to funds fixed rates. Rates have been changing too often for it to be all about base rate as we have seen this week.