6 Oct 2023
How do interest rates affect you and your money?
On Thursday 21st September the Bank of England made the decision to keep the bank rate remaining the same at 5.25%. This came as a relief to those thinking it may increase for a 15th consecutive time.
When will interest rates go down?
Despite there being a Bank rate pause, it is still at its highest level for 15 years. Raising interest rates means it is more expensive to borrow money, therefore, people have less to spend which in turn reduces demand and therefore inflation.
Policymakers will be looking closely at the “core inflation” rate which is a measure on food and energy which went from 6.9% in July to 6.2% in August.
Andrew Bailey, governor of the Bank of England said: “we have not had any discussion about reducing rates, because that would be very, very premature. Our job is to get inflation down.”
How do interest rates affect me?
High-interest rates mean house buyers and those remortgaging will have to pay a lot more currently due to rates being much higher compared to previous years.
There are 1.4 million people on tracker and standard variable rate (SVR) deals – these people usually see an immediate change in their monthly payments. Around 75% of mortgage customers have fixed-rate deals. Lenders may now have some confidence to lower mortgage rates, despite them being much higher than the last 10 years.
Why have rates been increasing?
It is not just the UK that has been increasing interest rates, although they have one of the highest rates across the world. Inflation has been fairly high worldwide following Covid restrictions being lifted and consumers spending more.
Businesses experienced issues getting goods to sell, oil and gas costs were higher than they had been previously, which was made worse by Russia’s invasion of Ukraine. There aren’t just global elements that have caused an increase in rates, there have been other factors in the UK, including rising wages.
Recent posts
Data shows landlords could miss out on green mortgages due to expired energy performance certificates.
Buying a house is a big deal, and where you are planning to buy will make a difference financially. In this short blog, we look at the most affordable and most expensive areas and how much you need to be earning to buy in there.
Pros and Cons of Equity Release
11 days ago
Equity release is a type of mortgage that allows homeowners 55 and over to access money from their property's equity without having to leave their home. This is done by securing a loan against the house which is usually repaid by selling the property when the borrower passes away or has to move into long-term care.
Your House Viewing Checklist
12 days ago
It’s important to ask questions about the property you are interested in before taking that step to make an offer. A little probing can make all the difference between buying your dream house or something that requires a lot of work.
Half of over 60s predicted to benefit from accessing housing wealth through Equity Release
15 days ago
There are millions of homeowners over the age of 60 who are likely to release money from their homes to pay for their lifestyle during retirement giving those who are 'asset rich but cash poor' a way to live out their retirement the way they wish.
Average Age of the First Time Buyer in the UK
22 days ago
The average age of a first-time buyer in the UK is two years older than 10 years ago. This is understandable with managing the cost-of-living and challenges within the economy such as high interest rates making it difficult to get onto the property ladder.
Delayed Start Mortgage from Skipton
24 days ago
Skipton Building Society launches ‘Delayed Start’ mortgage meaning first time buyers won’t be required to make repayments for the first three months.
According to a survey by Skipton, first time buyers who bought their home in the last five years found that in the first three months of living there, they were spending upwards of £30,000.
Gardening Tips for Beginners
2 May 2025
If you have recently moved into a property with a garden that requires a little TLC, or you’d like to get on top of your current green space, check out our tips.
More information
Trusted by
