MSE News

Bank of England increases base rate to 5.25% - here's how it impacts your mortgage and savings

The Bank of England has increased the base rate from 5% to 5.25% – its highest level in over 15 years. This rate is used by the central bank to charge other banks and lenders when they borrow money – and so it influences what borrowers pay and what savers earn.

It's the fourteenth time the central bank has raised rates after it first lifted them to 0.25% from 0.1% in December 2021.

The hike follows a dip in the Consumer Prices Index measure of inflation from 8.7% to 7.9% in June – its lowest rate in over a year. The Bank of England still expects inflation to fall significantly, to around 5% by the end of the year, reflecting less steep energy and food price rises.

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, we've included lender-by-lender analysis from all the major providers. Similarly, if you're a saver, we've included what's happening to savings rates.

See our Mortgages and Homes and Savings hubs for guides, calculators and more.

I have a mortgage. What happens now?

Most mortgage holders in the UK are on fixed-rate mortgages – so won't see any immediate changes. Here are the key points:

  • Fixes are fixed. As the name suggests, rates – and the amount you pay – WON'T change during the fixed period. Though this also means you're locked in if interest rates come down.

  • 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. Currently, a typical SVR is between 7.5% and 8.5% and this is likely to rise following today's announcement. A 'discount' mortgage, meanwhile, follows the SVR at a set rate, for example, if the SVR is 7% and the rate is SVR minus one percentage point, it's 6%.

  • 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 latest rise means about a £14 increase in your monthly payments for each £100,000 you owe on your mortgage.

Lender by lender analysis of what's happening to mortgage rates

Is your lender raising mortgage rates

Lender Change to tracker mortgages Change to standard variable rate (SVR) mortgages
Bank of Ireland Up 0.25 percentage points from 1 Sep TBC. Currently 7.79%
Bank of Scotland TBC TBC. Currently 9.7%
Barclays TBC TBC. Currently 8.74%
Clydesdale TBC TBC. Currently 9.24%
Co-op Bank TBC TBC. Currently 7.87%
Coventry Building Society Up 0.25 percentage points from 1 Sep Under review. Currently 7.24%
First Direct  TBC TBC. Currently 6.99%
Halifax TBC TBC. Currently 8.74%
HSBC Up 0.25 percentage points from 4 Aug Under review. Currently 6.99%
Leeds Building Society Up 0.25 percentage points immediately for 80% of customers. For the rest, rates will rise by 0.25 percentage points from 1 Sep Under review. Currently 7.99%
Lloyds Bank TBC TBC. Currently 8.74%
Metro Bank TBC TBC. Currently 8.50%
Up 0.25 percentage points from 1 Sep
Under review. Currently 7.99%
NatWest TBC Under review. Currently 7.74%
Newcastle Building Society Up 0.25 percentage points from 17 Aug Increasing from 5.94% to 6.94% on 1 Sep
Post Office


TBC. Currently 7.79%
Principality Building Society TBC TBC. Currently 7.45%
RBS TBC Under review. Currently 7.74%
Sainsbury's TBC TBC. Currently 7.49%
Santander TBC Increasing from 8.25% to 8.50% in early Sep
Skipton Building Society

No change

No change. Currently 6.79%
TSB TBC TBC. Currently 8.49%
Ulster Bank TBC Under review. Currently 7.74%
Virgin Money Under review Under review. Currently 9.24%
West Brom Building Society Up 0.25 percentage points from 1 Sep TBC. Currently 6.49%
Yorkshire Bank


TBC. Currently 9.24%
Yorkshire Building Society

Up 0.25 percentage points from 27 Aug

TBC. Currently 7.99%

Last updated 8 August 2023. This table refers to domestic mortgage rates only – changes may differ for buy-to-let mortgages.

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, as interest rates on fixed mortgages have shot up dramatically over the past 12 months. If you want price certainty and 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 till you're in the final three to six months of your initial deal, or pay the charge to leave your current mortgage early if you want to switch now.

  • 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. SVRs tend to be pricey, so it's likely you could save by switching your mortgage – do check, and talk to a mortgage broker about your options.

    If you're on a discount mortgage that has gone up, you may be able to remortgage without penalty, but do check. If not, again, you'll either need to wait till you're in the final three to six months of your initial deal, or pay the charge to leave your current mortgage early.

  • 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 – though currently many existing tracker mortgage rates are far cheaper than today's fixes. Also check if there are penalties to leave your current deal now – many trackers do have them.

    If you do have early repayment charges, you'll either need to wait till you're in the final three to six months of your initial deal, or pay the charge to leave early. If not, then you're free to switch to another mortgage.

If you're worried about keeping up with your repayments as rates rise, see our guide on what to do if you're struggling with your mortgage.

If you're 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 should benefit from base rate rises.

However, some high street banks have been slow to pass increases on to customers. As a result, the Financial Conduct Authority (FCA) has introduced a raft of new measures to ensure savers aren't being ripped off. These include reviewing how quickly banks change their savings rates after the base rate changes and taking "robust action" against providers that can't justify their low rates.

Here are the banks that are increasing variable savings rates for existing customers so far:

Variable savings rate increases announced following the base rate rise

Provider Rate rise Date of rate rise
Coventry BS 0.25 percentage points 14 August
HSBC 0.25 percentage points 10 August
Leeds BS 0.25 percentage points 15 August
Skipton BS 0.25 percentage points 14 August
West Brom BS 0.25 percentage points 10 August
Yorkshire BS 0.25 percentage points 10 August

Last updated: 8 August 2023. 

If you're thinking about switching, these are our current top picks for new savers (as at 9 August), but they could change at any time. For a full round-up, see our daily-updated Top savings guide:

  • Up to 5% on easy access. The top payer is currently Tandem at 5% with no minimum deposit and unlimited withdrawals.

  • Up to 5.45% on a notice account. If you're happy to wait for your cash, Dudley Building Society pays the top rate of 5.45% (minimum £1,000 deposit) – but you'll need to give 120 days' notice to withdraw.

  • Up to 6.06% on a one-year fix. OakNorth offers a one-year fixed account at 6.04% that you can open with just £1. If you have more to save, SmartSave offers the top rate at 6.06% with a minimum deposit of £10,000.

Remember, if you've saved with an authorised bank in the UK, you benefit from the protection of the Financial Services Compensation Scheme – see our Savings safety guide for full details.

MSE weekly email

FREE weekly MoneySaving email

For all the latest deals, guides and loopholes simply sign up today – it's spam-free!