Tracker & SVR
What a 1% rate rise costs, by balance size
The Bank of England base rate is currently 3.75%, and every time the Monetary Policy Committee meets, the news covers the move in percentage points, not pounds. That's not a number you can budget with. What actually lands in your bank account depends on your balance and your rate type, and it's worth knowing before the next decision, not after.
Who actually feels it, and when
A base rate move only changes your payment straight away if you're on a tracker or your lender's standard variable rate. On a tracker at base plus a fixed margin, a 0.25 percentage point base rate change becomes a 0.25 percentage point change on your mortgage on the date it takes effect. On SVR, the lender chooses whether and when to pass a base rate move on, though most do within a few weeks. If you're on a fixed rate, a base rate change does nothing to your payment until the fix ends. It still matters to you, because it shapes what the new fixed rates on offer look like when you come to remortgage, but it doesn't touch this month's bill. If you're not sure which of the three you're on, the mortgage basics guide covers how to check.
The number that matters: rate change against your own balance
A rate change is a percentage, but your mortgage is a specific amount of money, so the same 1% move costs very different amounts depending on what you owe. The table below shows the monthly cost of a 0.25%, 0.5% and 1% rate rise on a 25-year repayment mortgage at three common balance sizes, starting from a 5% rate.
£150,000 balance (£876.89/month at 5%): +0.25% adds £21.99/month, +0.5% adds £44.25/month, +1% adds £89.57/month.
£250,000 balance (£1,461.48/month at 5%): +0.25% adds £36.64/month, +0.5% adds £73.74/month, +1% adds £149.28/month.
£400,000 balance (£2,338.36/month at 5%): +0.25% adds £58.63/month, +0.5% adds £117.99/month, +1% adds £238.85/month.
The pattern holds regardless of your starting rate: doubling the balance roughly doubles the pound cost of the same percentage move, because the calculation runs off your outstanding balance, not the rate in isolation.
A worked example on a real tracker
Say you owe £250,000 with 22 years left, on a tracker priced at base rate plus 0.85%. At the current base rate of 3.75%, that's a rate of 4.60% and a monthly payment of roughly £1,507. If the base rate rose by a full percentage point to 4.75%, your tracker rate would move to 5.60%, taking the payment to roughly £1,649, an increase of about £142 a month, or just over £1,700 a year. That's the whole calculation: no fees, no charge for the base rate doing what it does, just the same balance at a higher rate.
Why the same rise costs a fixed-rate borrower nothing yet, and more later
If you're mid-fix, a base rate rise doesn't touch this month's payment, but it changes the rate you'll be offered when your fix ends. Lenders price new fixed deals off swap rates, which move ahead of and independently from the base rate itself, so a base rate rise doesn't translate pound-for-pound into a higher remortgage rate. It's a related but separate number. If your fix is ending soon, see what actually happens when a fixed deal runs out for the timeline that matters more than the base rate headline.
Cushioning a rise before it lands
If you're on a tracker or SVR and want to blunt the next move, overpaying now reduces the balance the rate is applied to, which shrinks the pound cost of every future rise, not just the next one. Most fixed deals also carry a 10% annual overpayment allowance with no charge, covered in the 10% overpayment rule. Either way, the balance in the table above is the number to watch, not the headline rate.
See your own number
The tables above use round balances and a flat 5% starting rate to keep the comparison simple. Your own mortgage has its own balance, its own rate and its own term left, and the same maths applies to whatever those numbers are. Put your figures into the free timeline to see what a rate change would do to your actual payment, not an approximation of it.
Frequently asked questions
Does a base rate rise affect my mortgage immediately?
Only if you're on a tracker or standard variable rate. Trackers move on the date the base rate changes, by the same amount. SVR usually follows within a few weeks, at the lender's discretion. Fixed rates don't move until the fix ends.
How much does a 1% rate rise cost on a £250,000 mortgage?
On a 25-year repayment mortgage starting at 5%, a 1 percentage point rise adds roughly £149 a month. The exact figure depends on your rate, balance and remaining term.
Why doesn't a base rate rise change fixed mortgage rates directly?
New fixed rates are priced off swap rates, which anticipate where the base rate is heading rather than reacting to where it already is. A base rate move and a change in fixed-rate pricing are related but separate numbers.
Model your own rate rise
Enter your balance, rate and term on the free timeline to see what a 0.25%, 0.5% or 1% change would really do to your payment. Nothing stored.
Examples are illustrative and rounded. Your own mortgage offer and lender confirm your actual figures and dates. This is information, not financial advice. For advice on your circumstances, speak to a mortgage adviser regulated by the FCA.