The base rate has risen to 0.75% today
The Bank of England has increased the base rate to 0.75%, signalling the beginning of the end for a period of accommodative monetary policy.
The increase followed several false starts earlier this year thanks to an erratic flow of economic data. However, a rise became more likely in June after Bank of England chief economist Andy Haldane said the economy was now strong enough to support it.
The rate is now the highest it has been since March 2009, which means many borrowers will not have experienced a base rate above 1%. In fact, more than 2.5 million first-time-buyer mortgages were issued between March 2009 and May this year, UK Finance data shows.
Furthermore, about 1.2 million mortgages issued over that period were on tracker rates and many of those borrowers will now be wondering how steep the rate hike curve will be.
Others will want to take the opportunity to lock in a fixed rate to hedge against future rises and cap this major part of their expenditure.
If you would like to review your borrowing options or have any questions about what the rest of 2018 holds, please get in touch.