Key Takeaway

If the Bank of England raises the base rate, homeowners on tracker or standard variable rate (SVR) mortgages will see their monthly payments increase almost immediately, with estimates suggesting an extra £450 per year on an average mortgage. Those on fixed-rate deals remain protected until their fixed period ends. Now is the time to check your mortgage type and consider whether switching to a fixed rate could protect you from further rises.

Who Will Be Affected?

A Bank of England base rate increase directly impacts two groups of borrowers:

Tracker mortgage holders: These mortgages are linked to the base rate, typically at a set margin above it (for example, base rate plus 1.5%). If the Bank raises the base rate by 0.25 percentage points, your rate rises by the same amount, usually within days.

Standard variable rate (SVR) borrowers: Most lenders adjust their SVR in line with base rate changes, though they are not legally required to pass on the full increase. SVR borrowers, often those who have come to the end of a fixed deal and not remortgaged, typically pay higher rates already and will feel the increase acutely.

Fixed-rate borrowers are protected: If you are currently on a fixed-rate mortgage, your monthly payment will not change until your deal period ends. However, when you come to remortgage, you will face whatever rates are available at that time, which may be significantly higher than your current deal.

How Much Could It Cost?

On a typical £200,000 mortgage with 20 years remaining, a 0.25 percentage point rise in the interest rate adds approximately £28 to £30 per month, or around £340 to £360 per year. For those on larger mortgages or with longer terms remaining, the increase could easily reach £450 or more annually, as suggested by recent industry estimates (as of October 2026; rates change frequently, verify current terms with an FCA-authorised lender or adviser before deciding).

The cumulative effect matters: if the Bank of England raises rates multiple times over the next year, the total cost increase could be substantially higher. Borrowers who switched to a tracker mortgage when rates were low may now find themselves exposed to rising costs.

What You Can Do

Check your mortgage type: If you do not know whether you are on a tracker, SVR or fixed rate, check your most recent mortgage statement or contact your lender. Your mortgage type determines whether you are immediately affected.

Read also: Mortgage Interest Rates Today: Fixed Rates Edge Lower as Tracker Mortgages Remain Volatile

Consider remortgaging to a fixed rate: If you are on a tracker or SVR and expect rates to rise further, remortgaging to a fixed-rate deal could protect you from future increases. Be aware of early repayment charges (ERCs) if you are still within a deal period, and factor in arrangement fees for the new mortgage. Speak to an FCA-authorised mortgage adviser to compare whether the cost of switching is outweighed by the protection a fixed rate offers.

Review your budget: If you cannot or choose not to remortgage, review your household budget to accommodate higher monthly payments. According to the Bank of England, even modest rate rises can affect affordability, particularly for those who borrowed at higher loan-to-value ratios or stretched their income to secure the mortgage initially.

Monitor future decisions: The Bank of England publishes its Monetary Policy Committee decisions regularly. Keep an eye on announcements so you can plan ahead if further rises are expected.

Important Disclaimers

This article provides general educational information about how Bank of England base rate changes affect UK mortgages. It is not regulated mortgage advice, and it is not personalised financial, lending or legal advice. Refisage is not authorised by the Financial Conduct Authority (FCA). Your personal circumstances, mortgage product, lender terms and eligibility for remortgaging vary, and rates and deals change frequently. You should consider speaking to an FCA-authorised mortgage adviser before making any decisions about remortgaging or changing your mortgage product.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Mortgage costs, early repayment charges, arrangement fees and eligibility criteria vary by lender and product. Always verify current terms and rates with an FCA-authorised lender or adviser before deciding. For free, impartial guidance, visit MoneyHelper.