Bank of England keeps interest rates at 5.25%: what does it mean for you?

Here’s how the interest rate staying the same could impact your mortgage, whether you’re a homeowner or property investor.

For the sixth time, the Bank of England (BoE) announced that the base rate will remain the same, staying at 5.25%*.

So, what does this mean for you? Let’s take a deep dive into the current mortgage market to help you understand what’s going on, what it means for your mortgage – and what you can do.

What is the Bank of England (BoE) base rate?

Set by the BoE, the base rate is a benchmark for the cost of borrowing money. It is important for you to understand because mortgage lenders base the rates they charge on it. So, if the BoE increases the base rate, it will inevitably increase the cost of borrowing. On the flip side, if they decrease the rate, it could decrease the cost of borrowing.

In the current case, as the base rate has remained the same, it may be a good time to review your mortgage options.

The Bank of England’s Monetary Policy Committee sets interest rates, known as the Bank of England base rate. The Bank of England base rate is now 5.25% (correct as at May 2024)*

I am a landlord – what does this mean for me?

If you’re a landlord with a tracker or variable rate mortgage, the base rate staying the same will usually also mean that your repayments will stay the same.

Will interest rates remaining the same mean lower house prices?

It’s difficult to tell. The increase or decrease in house prices very much depends upon the supply and demand of property. Although we’ve experienced a record house price growth over recent years, the recent higher inflation rates and the cost of living has also affected house prices.^ To understand how the base rate may have affected your property’s value, it’s best to get an up-to-date valuation.