Mortgage guides

Understanding mortgage interest rates


Why might my interest rate change?

Your mortgage interest rate may be affected if the Bank of England Base Rate changes. But it could also change if your current deal ends.

Our guide will help you understand the options available if your rate changes.

Bank of England Base Rate

What is the Bank of England Base Rate and who sets it?

  • The Bank of England (BoE) is the central bank of the UK
  • Base Rate is an interest rate set by the Bank of England’s Monetary Policy Committee
  • The Bank of England Base Rate is one of the most important interest rates because it tends to influence all the other interest rates, such as those set by banks, including mortgage, loan and savings rates and rates for businesses. 
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How could it affect you?

  • The Bank of England Base Rate is taken into account as a factor when deciding the Royal Bank of Scotland Bank base rate
  • Therefore, if the Bank of England Base Rate changes, your monthly payment may be affected if you hold a mortgage, loan or savings product
  • We will always notify you in advance of changes to any of our products so you have plenty of time to review your options.
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What happens if my mortgage rate changes?

  • If you are on a fixed rate mortgage, you won’t be affected by higher interest rates until your deal expires. When you're coming to the end of your deal, you may want to remortgage or switch your mortgage onto a new fixed rate however, you may find rates higher than when you last fixed.


  • If you are on a variable mortgage rate, your monthly payments will increase in line with the Bank of England’s changes. You may want to consider remortgaging or switching your mortgage to a fixed rate so that you know what your monthly mortgage payments will be.

What can I do next?

If your mortgage rate and repayments are going to change, there are a number of steps you may want to take.


Work out your budget

Use our calculator to see how much you can afford by working out your monthly income and outgoings.


Think about a new mortgage deal

Take a look at our mortgage switcher information to see if it would be suitable to move to a new deal.


Make mortgage overpayments

If your rate goes down, you could make overpayments in a lump sum or by increasing your monthly payments. Use the calculator to see the impact this would have. Charges may apply.

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