Bank of England Base Rate

Changes to the Bank of England Base Rate may impact your mortgage repayments. For example, the higher the base rate, the higher the interest rate on mortgages but if the rate goes down you could be paying less.

What is the current Bank of England (BoE) Base Rate?

The current BoE base rate is 5.25%.

 

What happens when the Bank of England announces a rate change?

  • First, we'll review our variable rates and decide what changes we'll be making
  • For our existing mortgage customers, any change in interest rate will usually take effect from the 1st of the month following the Bank of England's announcement
  • For new mortgage customers, the changes take place with immediate effect

If your mortgage is affected, we'll write to you to tell you about the change to your interest rate and monthly payment ahead of your monthly payment due date.

How can changes to the Bank of England base rate affect your mortgage?

Changes to the Bank of England base rate will only affect your mortgage if it’s on a certain type of interest rate.

Fixed rate mortgages:

  • If you have a fixed rate mortgage, your interest rate will not change during the fixed rate period.


Variable rate mortgages:

  • If you have a lender variable rate mortgage, your interest rate may change if the base rate does. This is because we usually review our lender variable interest rates following any change to the base rate. If we do change the lender variable rate, we'll contact you to explain why and tell you what your new monthly payment will be.
  • If you have a tracker rate mortgage, your interest rate is linked to the Bank of England base rate. It'll change if the base rate does.
Halifax variable rate mortgages video.

Comparing fixed and variable rates 

There are different types of mortgage interest rates and each work in different ways. We’ve explained the differences so you can decide the one best suited to your needs.

If you decide to take out a new fixed interest rate with us, we may charge you a fee, called a product fee. If you’re an existing customer, you won’t usually pay legal fees or need a new valuation. This is even if you switch when your current rate ends.

  • Fixed interest rate

    Variable interest rate - 

    Lender variable rate

    Variable interest rate - 

    Tracker rate

    What are the different types of rates?

    Fixed interest rate

    Your interest rate stays the same for a set amount of time.

    At the end of the fixed rate period, we’ll change you to another rate. This is usually one of our variable rates. 

    Variable interest rate - Lender variable rate

    We set our lender variable rate, and we can change it, but it will only go up if there’s a:

    • change to our cost of lending or
    • change to laws and regulations. 

    Variable interest rate - Tracker rate

    Your interest rate is linked to the Bank of England base rate and changes if the base rate does.

    Your interest rate will be made up of the base rate plus or minus a percentage. 

    Can my interest rate change?

    Fixed interest rate

    No, not during the fixed rate period. 

    Variable interest rate - Lender variable rate

    Yes, your interest rate will go up or down if we change our lender variable rate.

    Variable interest rate - Tracker rate

    Yes, your interest rate will change if the base rate goes up or down.

    Can my monthly payments change? 

    Fixed interest rate

    We may update your monthly payment amount each year to make sure your payment is on track. For example, if you’ve made an overpayment.

    Variable interest rate - Lender variable rate

    Yes, your monthly payment can change if rates go up or down. If they go up, you could end up paying more than you budgeted for. 

    Variable interest rate - Tracker rate

    Yes, your monthly payment can change if rates go up or down. If they go up, you could end up paying more than you budgeted for. 

    Will I be charged if I overpay or pay my mortgage off early? 

    Fixed interest rate

    You may be charged if you repay all or part of your mortgage before the fixed rate period ends. We call this an early repayment charge.

    Variable interest rate - Lender variable rate

    You won’t usually be charged if you repay all or part of your mortgage. 

    Variable interest rate - Tracker rate

    You may be charged if you repay all or part of your mortgage in a certain amount of time after you take out a new tracker. We call this an early repayment charge. 

    We’ll let you know before making changes to your interest rate or monthly payments.

  • To help you work out which type of mortgage is right for you, here’s some things you might want to think about:

    • Would you like to know that your interest rate won’t change for a certain amount of time?
    • Could you afford to make higher monthly payments if interest rates go up?
    • Would you like to pay more than your usual monthly payment without being charged? You can find out more about early repayment charges.

    For more information about these types of mortgage rates, you can call us on 0345 727 3747. We’re here Monday to Friday 8am to 8pm, and Saturday 9am to 4pm.  If you’d like some independent advice, you may want to talk to a financial adviser.

Rate change calculator

You can use our rate change calculator to get an idea of how much your monthly mortgage payment could change.

You'll need:

  • to get your remaining mortgage balance and term from your most recent mortgage statement
  • to know the interest rate you'll be moving to

 

Current mortgage balance

You can find your mortgage balance in your most recent annual mortgage statement.

You'll need to take into account any payments made on your mortgage since the date of the statement. If you've fallen behind with your payments on any part of your mortgage that is a repayment mortgage, you'll need to take off the amount of arrears from the current balance.

Important: If you have a mortgage made up of part repayment and part interest only, you'll need to do a separate calculation for each.

£
Remaining term

The length of time you have left to pay back your mortgage.

You can find your remaining term details in your most recent annual mortgage statement.

Important: Please check the remaining term on your main account and each sub account.

Current interest rate

This is the interest rate for your sub account on the date shown.

You can find your interest rate details in your most recent annual mortgage statement.

Important: Please check the interest rate on your main account and each sub account.

Repayment type

This your current repayment method. It can be either Repayment or Interest Only. You can find your repayment details in your most recent annual mortgage statement.

Interest rate change

Use the + or - buttons to add and deduct amounts of 0.25%. Or just type in the rate change percentage you'd like to see illustrated.

Estimated monthly payment change

Based on your inputs, if the interest rate changed from ##currentinterestrate##% to ##newinterestrate##%, the approximate change to the monthly payment would be:

£##changerepayment## per month*

* The figure shown is for illustrative purposes only.

Based on your inputs, if the interest rate changed from ##currentinterestrate##% to ##newinterestrate##%, the approximate change to the monthly payment would be:

£##changeinterest## per month*

* The figure shown is for illustrative purposes only.

What are my next steps?

If your mortgage rate and monthly repayments are changing, then there are a few things you can do.

Switch your mortgage deal

If you’ve already got a Halifax mortgage, we’ve made it easy to switch to a new deal online.

Find your new deal

Worried about paying your mortgage?

Don’t wait until you’re about to miss a payment before getting in touch. The sooner you talk to us, the more options you’ll have. We have tools and guides to support you, and talking to us won’t affect your credit rating.

Get support

Overpayment calculator

Our mortgage overpayment calculator can give you an idea of how overpaying on a mortgage could save you money by reducing the amount of interest charged.

Overpayment calculator
  • If your mortgage is affected, we'll write to you to tell you about the change to your interest rate and monthly payment ahead of your monthly payment due date.

    We’ll change the interest rate on tracker rate mortgages starting from the 1st of the month following a Bank of England change.

  • Where your mortgage is made up of sub-accounts, we look at each sub-account separately and change the monthly payment only on sub-accounts affected by the change. This may mean that some and not all sub-accounts get a monthly payment recalculation.

    Mortgages on daily interest

    • For repayment sub accounts, we work out what you owe on the day we recalculate your monthly payment. We add this to the amount of interest we expect will be charged to the end of that month. Then we take off the amount of any arrears that you owe, which you will need to pay separately.
    • For interest only sub accounts, we work out what you owe on the day we recalculate your monthly payment. We add this to the amount of interest we expect will be charged to the end of that month.
    • We work out how many months remain to the end of the mortgage term starting from the following month and then work out what your new payment should be.
    • However, if we receive your monthly payment after we recalculate, it will mean the recalculated payment amount will be higher than it needs to be. If this happens and you would like us to recalculate your monthly payment, you can contact us.

    Some customers with older mortgages have interest calculated on a monthly or annual basis. We recalculate the payments on these mortgages differently. If you think you are on monthly or annual interest and would like more information, or you would like to switch to daily interest, please contact us.

    For interest-only mortgages, you pay only interest during the term of your mortgage and pay a lump sum at the end of the term to pay off everything else you owe. To calculate your monthly payment, we take the amount you owe on the day we do the recalculation together with how much we think interest will be to the end of that month. We then calculate a monthly payment at a level that pays the interest-only on this amount taking into account any interest rate change.

    Where part of your mortgage is repayment and part interest only, each method will apply to the part concerned.

  • If you’ve made overpayments since the last time we recalculated your monthly payment, they'll be included the next time your monthly payment is recalculated. This means your balance will have been reduced by the overpayment amount and your new monthly payment could be lower even though the interest rate is going up.

  • If your mortgage is on a fixed rate of interest, then the interest rate on the part that is fixed won’t change. When the fixed rate comes to an end, we'll calculate a new monthly payment at the new variable interest rate that applies at that time.

  • Any additional borrowing you have arranged on a fixed rate of interest won't change as a result of a change to our variable mortgage rates.

    If you have arranged additional borrowing at a variable rate any offer will show the interest rates that applied at the time the offer was made. If we change the variable rate after the offer is issued, we won’t write to you until you complete. When you complete, the letter will have a new monthly payment and interest rates that will apply.

  • Any product switch you have arranged will be on a fixed rate of interest and this won't change as a result of a change to our variable mortgage rates. However, there may be part of your existing mortgage being charged at a variable rate. We'll recalculate the monthly payment on any parts of the mortgage being charged interest at a variable rate and add these to the monthly payments on any fixed rate parts to give you a total new monthly payment.

  • As Tracker rates are linked to the Bank of England base rate then your rate will change if the base rate does. We'll contact you to tell you what your new monthly payment will be.

  • If you have arranged to switch to a new deal and the new rate hasn’t yet taken effect, you can contact us and tell us that you have changed your mind. If the new rate already applies, you can still change your mind. But only as long as you tell us within 28 days of the new rate taking effect.

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Need help with understanding your mortgage interest rate? Get in touch to discuss your mortgage.

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You could lose your home if you don’t keep up your mortgage repayments