Bank of England increases base rate to 0.75% – what the rise means for your mortgage and savings

The increase means it is the third time in quick succession that the central bank has increased rates after it first lifted them to 0.25% from 0.1% in December last year and then upped them to 0.5% in February.

Eight members of the MPC voted in favour of the rise to 0.75%, while one voted to keep the rate at 0.5%.

The rise comes as UK inflation looks set to increase above 7% by spring, according to a Bank of England forecast. Inflation stood at 5.5% in the year to January 2022, according to the most recent figures from the Office for National Statistics. 

Base rate rises will affect most mortgages unless they're fixed. If you have a mortgage and want to check what your bank or building society is doing in response to the rise, see our table below detailing what action all the major providers are taking, which we will update as we go. We've also rounded up any savings providers passing the base rate rise on.

I have a mortgage. What happens now?

The vast majority of mortgage holders in the UK have a fixed-rate mortgage, so for most, nothing will change. The key points for mortgage holders are:

• Fixes are fixed. But sort a new deal soon if yours is coming to an end. As the name suggests, rates – and the amount you pay – WON'T change during the fixed period.

• Lenders MAY raise standard variable rate (SVR) or 'discount' mortgages. These move at the whim of lenders. You'll usually be on an SVR after your fix or tracker ends. A 'discount' mortgage, meanwhile, follows the SVR at a set rate, for example, if the SVR is 4% and the rate is SVR minus one percentage point, it's 3%. We've more on what the big lenders plan to do with SVR rates below.

• On a tracker mortgage? Rates will increase. As the name suggests, these 'track' the base rate, so mortgage costs will go up. In general, this is around an £11 increase in your monthly payments on a £100,000 mortgage.

What should I do with my mortgage?

What you should do depends on what sort of mortgage you have now and whether you're close to the end of your initial mortgage term:

• If you're on a fixed rate. Nothing will change with your existing deal, however, any new deal you remortgage to in future may now be more expensive. If you're close to the end of your current term, you might want to search for a new mortgage deal now. You can usually lock in a mortgage offer three to six months ahead of time.

  If you've six months or longer to go on your fix, you'll either need to wait for your initial deal term to run out, or pay the charge to leave early. Our Ditch your mortgage? calculator can help you decide.

• If you're on a standard variable rate (SVR) or 'discount' mortgage. If you're on the SVR, you're free to remortgage to a new deal at any time. It's worth checking if you can as SVRs tend to be pricey.

  If you're on a discount mortgage that has gone up, you may be able to remortgage without penalty, but do check. If not, you'll either need to wait for your initial deal term to run out, or pay the charge to leave early. Again, our Ditch your mortgage? calculator can help you decide.

• If you're on a tracker mortgage. If you're concerned about this rise, or further rate rises, check now to see if you can switch to a better deal. However, do check if there are penalties to leave your current deal now – many trackers do have them. If not, then you're free to switch to another mortgage.

  If you do have early repayment charges, you'll either need to wait for your initial deal term to run out, or pay the charge to leave early. Our Ditch your mortgage? calculator can help you decide.

If looking for a new deal, see our Remortgage guide or First-time buyers' guide for help, plus our Mortgage Best Buys comparison tool for the top deals. And, if you're in need of a mortgage broker, visit our Cheap mortgages guide for the full breakdown.

I'm a saver. What happens now?

The base rate increase could affect all types of savings accounts. In general, savers benefit from base rate rises – although most savings rates are still relatively poor and rates didn't go up much after the last rise.

However, unlike mortgages rate rises, which many lenders have confirmed will be coming in over the next few months, most major providers are still deciding what to do with their savings rates. We have heard from two providers that they'll be raising rates, and will add in any others over the coming days:

• Bank of Scotland will increase rates on its Fixed Rate ISA and Fixed Rate two-year account by 0.2 percentage points and its Monthly Saver by 0.25 percentage points from 6 April. It will also up rates on its Instant Access and Variable ISA by 0.09 percentage points from 12 April.

• Halifax will increase rates for its Regular Saver account by 0.25 percentage points, and its Fixed Rate ISA and Fixed Rate two-year account by 0.2 percentage points from 6 April. It will also up its Instant Access savings rate by 0.14 percentage points and its Variable ISA by 0.19 percentage points from 12 April.

• Leeds Building Society will increase rates by up to 0.3 percentage points from 1 April 2022.

• Lloyds Bank will increase rates for its Monthly Saver and Club Lloyds Saver by 0.25 percentage points and its Fixed Rate ISA and Fixed Rate two-year account by 0.2 percentage points from 6 April. It will also up rates on its Instant Access account, Variable ISA and Club Lloyds Saver (on balances below £25,000) by 0.09 percentage points from 12 April and its Club Lloyds Saver (on balances above £25,000) and Club Lloyds Variable ISA by 0.25 percentage points from 12 April.

• Santander will increase rates on tracker products, Rate for Life and Good for Life savings by 0.25 percentage points from 6 April 2022. Santander Everyday Saver, Santander Instant Saver and Santander ISA Saver rates will increase from 0.01% to 0.1%, the Flexible Saver for Kids will increase from 0.1% to 0.35%, and the First Home Saver will increase from 0.6% to 0.75%.

• Skipton Building Society will increase rates by a minimum 0.5 percentage points from 31 March 2022.

• Yorkshire Building Society will increase rates by up to 0.65 percentage points from 12 April 2022.

• Virgin Money will increase rates on tracker savings products by 0.25 percentage points, while all other savings products are under review. We've asked when this will come into effect and we will update this story when we know more.

Savers should wait a few days before switching

Whatever rate you're on currently, it may be worth waiting a few days to see if best-buy rates improve before switching. These are our current top picks, but they could change at any time. For a full round-up, see our daily-updated Top savings guide:

• Up to 0.84% on easy access. Cynergy Bank currently pays the top rate of 0.84% and its account can be opened online with £1. However, the rate plummets after a year, so diarise to ditch it then.

• Up to 1.55% with a one-year fix. Brown Shipley is offering a rate of 1.55%, though its account can only be opened via savings marketplace Raisin.

• Up to 1.91% with a two-year fix. Hampshire Trust Bank is offering 1.91%, and its account can be opened online with £1.