Savings and mortgage base rates

Guide to the Bank of England’s base rate by Furness Building Society

What base rate rises mean for you

Rising inflation and interest rates can put significant pressure on families, so it’s natural to feel alarmed when the cost of living starts to creep up. With so much to consider when it comes to inflation, you may be wondering what savings and mortgage base rate rises mean for you. Or, more importantly, how you can best secure your finances for the future.

In this guide, we explain what the Bank of England base rate is, how the base rate affects mortgages and loans, and whether or not interest will rise for savings accounts.

Bank of England building in London.

What’s the Bank of England base rate?

Currently at 5.25%, the Bank of England base rate is the most important interest rate in the UK. It not only sets out the ‘cost’ of borrowing money but also helps to regulate inflation. 

Typically, if inflation starts to dramatically increase or decrease, then the Bank of England will reset the base rate to keep inflation in check. This happened more recently in 2022 when inflation peaked at 11.1%. As a result, the Bank of England increased its base rate, which it did for 14 consecutive months until August 2023. It has stayed at 5.25% for six months in a row.

How does the base rate affect mortgages?

What’s the difference between interest and inflation?

Why do interest rates rise with inflation?

When do interest rates rise?

Do increased interest rates mean more 90% and 95% mortgages?

When will interest rates rise for savers?

Making the most of base rate changes

Hopefully, you’ve found this guide to savings and mortgage base rates useful. If you’re currently looking to switch from a variable rate mortgage to a fixed-term mortgage, you can compare our current interest rates using our Mortgage Finder.

Alternatively, get in touch with our team on 0800 781 4311 for one-on-one advice.

Hoping to boost your savings? To take advantage of changing interest rates for savings accounts, use our Savings Account Finder to find the right account for you. If you currently have an ISA, then you might also find our ISA Season guide useful.