The Bank of England increased the base rate on 5 November as many households continue to feel the pressure on their finances.


The Bank of England has confirmed that the base rate has increased from 3.75% to 4%. It had remained at 3.75% since last December, after being reduced from 4%.

The increase follows a recent rise in inflation and comes amid economic uncertainty that is making the market challenging for many households.

What could the rise mean for your mortgage?

The effect will depend on the type of mortgage you have:

  • Fixed rate: your monthly payments should stay the same until your current deal ends.
  • Tracker rate: payments usually move in line with Bank Rate, so they are likely to rise.
  • Standard variable rate: your payments may rise if your lender passes on the increase.

If you’re due to remortgage in the next six months, speaking to a mortgage adviser could help you understand your options. Depending on your circumstances and your lender’s criteria, these might include extending your mortgage term or switching to interest-only payments. These changes may reduce your monthly payments, but they may not be suitable for everyone so it’s important to speak to an experienced mortgage adviser.

Household finances remain under pressure

Many people are feeling less certain about their finances following the Autumn Budget. In a recent snap poll of 300 UK adults, 4% said they felt more confident about their personal finances, while 25% felt less confident. More than half said the Budget had made no difference, and 13% were unsure.

Some households are reviewing their plans: 18% said they were looking again at their savings and investments, 8% were reassessing their pension or retirement plans, and 6% were reconsidering tax or estate planning.

Some lenders have cut mortgage rates

Despite the base rate increase, there is, however, some positive news for borrowers. Several major lenders have cut mortgage rates this week, with some deals starting below 5%. Barclays and Nationwide are offering rates from 4.89%, while Halifax’s start at 4.93%. Virgin Money has also reduced some rates. The lowest rates are usually available to buyers with larger deposits, and rates can change.

Could equity release be an option?

If you’re over 55 and concerned about the cost of living or your finances, equity release may be one option to discuss. Some of our older clients have explored using it to ease financial pressure or replace an existing mortgage. It isn’t suitable for everyone and can affect your home, inheritance and entitlement to means-tested benefits.

Our equity release specialist, Steve Dale, can explain how it works and help you consider whether it may fit your plans. He has been working with clients to help them restructure their finances and ease some of the pressure.

If you’d like to talk through your mortgage or finances, we’re here to help. Please get in touch for a friendly, no-obligation conversation. Steve is an experienced equity release specialist and can meet you in person at a convenient location.