The 3rd August 2023 marked the 14th time England’s base rate has risen to 5.25%. At The Levels Financial, we know how important it is to be aware of all industry and financial updates, which is why we always keep our ears to the ground and are up to date with the ever-changing financial world.
- Why Has The Base Rate Increased Again?
- How Has The Base Rate Changed In The Past?
- What Does the Change Of Base Rate Mean For Mortgages?
- Get In Touch For More Information About The August 2023 Base Rate Change
Why Has The Base Rate Increased Again?
The base rate is the interstate rate at which banks borrow money from the Bank of England the higher the rate the more expensive loans become and the lower the rate, in theory, the cheaper the loans become for the borrowers.
2022 and 2023 have been a period of change, especially within the finance sector. The Bank of England has increased and adjusted the base rate multiple times, raising it from 4% to 4.5% in March 2023 and then from 4.5% to 5% in June this year. (Read more about the changes in our blog posts, ‘March’s base rate increase & what it means for you’ and ‘Base rate increased to 5% – What this means for you’.)
The Bank of England will increase or decrease the base rate to react to the prices of items we purchase, the changes in the rate of interest are to make sure the cost of purchases doesn’t rise or fall too quickly. The central bank rate influences other markets and UK interest rates, across the board not just on loans.
How Has The Base Rate Changed In The Past?
Since December 2021, the UK’s base rate has been increasing in regular increments from 0.25% to 5.25%. As outlined in the graph below.
| Date Of Increase | Changed By (%) | Base Rate |
|---|---|---|
| 11th March 2020 | -0.15% | 0.25% |
| 19th March 2020 | -0.15% | 0.10%. |
| 16th December 2021 | +0.15% | 0.25% |
| 3rd February 2022 | +0.25% | 0.50% |
| 17th March 2022 | +0.25% | 0.75% |
| 5th May 2022 | +0.25% | 1.0% |
| 16th June 2022 | +0.25% | 1.25% |
| 4th August 2022 | +0.50% | 1.75%. |
| 22nd September 2022 | +0.50% | 2.25% |
| 15th December 2022 | +0.50% | 3.50% |
| 2nd February 2023 | +0.50% | 4.00% |
| 23rd March 2023 | +0.25% | 4.25% |
| 11th May 2023 | +0.50% | 4.50% |
| 22nd June 2023 | +0.50% | 5.00% |
| 3rd August 2023 | +0.25% | 5.25% |
The Bank of England will evaluate the base rate at regular intervals throughout the year and will meet to discuss if it should be increased or decreased, depending on the financial climate of the country. While the 19th March 2020 base rate was the lowest on record, the highest recorded base rate was in November 1979, at 17%.
What Does the Change Of Base Rate Mean For Mortgages?
Depending on the type of mortgage you are on will impact how much the base rate rise will have on you. For example, if you’re on a fixed-rate mortgage, you will not be impacted by this base rate increase at this moment, however, if you’re close to remortgaging, being up to date with the latest rises will be more important for you. However, if you’re on any form of tracker, standard variable rate or discounted variable rate mortgage deal, then you will most likely see a change in your monthly repayments.
If you’re worried about the increased base rates or would like some additional information or advice, our team of highly-trained and experienced mortgage advisors are on hand to assist you in any way you may need. Whether you’re a first time buyer, moving home, or have a buy to let mortgage, it is always important to understand how much your repayments will be each month.
For more information on the different types of mortgages available, see our blog post, ‘four things to know when remortgaging in Yeovil.’
Get In Touch For More Information About The August 2023 Base Rate Change
For more information or to find out how we can help you with your montage, contact our friendly team at admin@thelevelsfinancial.co.uk or call us at 01458 772040. We have a wide range of appointments available to fit around your busy schedule.
Important information:
You may have to pay an early repayment charge to your existing lender if you remortgage.
If you do not keep up with your remortgage repayments your home may be repossessed.
A fee may be included for mortgage advice. The actual remortgage amount you pay will differ depending on your circumstances. Fees can be up to 1%, but typically a fee is 0.3% of the borrowed amount.
