It’s all about that Base (rate)…

Last updated: December 1, 2022

Graham in Nailsworth Hudson Rose office

As I write this, almost a week has passed since the anticlimactic event that was the Monetary Policy Committee (MPC) meeting and potential base rate rise. In the run up to the November meeting, the press (both industry and national) was full of the news that there was to be a 0.15% increase in the Bank of England Base Rate (BOEBR) which was to be the first shift in rate since March 2020 when it fell by 15 points to it’s current record breaking low of 0.1%.

But… the increase never came..!

I don’t want to dwell on who on the committee voted for what and the reasons behind why they did or didn’t do what they did or didn’t do (I am not sure that even makes sense, but you know what I mean!)

As a mortgage loving son of a gun I want to focus on what has happened in the mortgage market and how this might affect you and your largest outgoing.

Four people with sunglasses in front of graphic mural

So, what has happened?

Well, the City started to feel a rate rise was likely in the couple of weeks prior to the Bank of England meeting. This meant the markets and rates (known as swap rates) from which lenders borrow in order to finance their mortgage operations also started to increase in anticipation.

Lenders generally borrow money in ‘tranches’ and then sell this onto end customers as fixed rates, once they have used that tranche of funds up they go back to the market to grab some more – the cost of which is dictated by the swap rates at the time. (N.B I am focusing on fixed rates here as they account for the majority of the market at present)

The end result is that you find fixed rates generally increase before the Base Rate announcement.

We were able to secure some really low fixed rates for clients before they were withdrawn and it is always a bit of a frenzy when the rates shift. I should probably add a line about why having a good mortgage broker can help but that would be far too blatant 🤣

Where next?

Well, we are not expecting rates to fall again. The Base Rate may have stayed at its current level but the general consensus is that a rate rise may come next month, followed by another in the new year.

We shall see how this pans out.

What I would like to STRESS (see, I even wrote it in big letters) is that you have not missed the boat on low rates. Yes, they have increased from where they were a couple of weeks ago but they are still offering incredible value.

How can you play the game and win?

Simple, ACT EARLY (there’s those big letters again)

We can secure new mortgage rates 6 months before your current deal expires. Even if your rate ends in May you can secure something now ready for the end of your current product and by securing a rate early you are protected from any upcoming rate rises.


Whilst you’re here why not check out some more of our handy blogs?

What does ‘remortgage’ actually mean?

3 mistakes not to make when choosing Life Insurance

Buy-to-Let Mortgages: Affordability and Deposit


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Hudson Rose Services Ltd is an Appointed Representative of Stonebridge Mortgage Solutions Ltd, which is authorised and regulated by the Financial Conduct Authority.
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