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Interest rate announcement: September 2023

September means another Bank of England Interest rate announcement — so let's look at what it means for you.


With the interest rate announcement today, we know that you may have some questions about what it means for you — whether you’re thinking of buying, selling, or just wondering about your current mortgage. Don’t worry, we’ve got you covered. 

What happened with interest rates today? 

The Bank of England, which sets the base interest rates, made an announcement that interest rates will be staying the same. Now, something not changing may not seem newsworthy, but you have to remember that they had raised rates 14 times in a row before this. So this was a big departure. 

Why did rates stay the same?  

Great question. Many predicted that the Bank of England would raise rates again today, because inflation remains high — and keeping down inflation is one of their main goals. Ultimately, the Bank of England seems to have decided that after so many rises they don’t need to keep raising the interest rate to fight inflation. 

It may be that factors like whole energy costs falling and other macro factors have made them feel more comfortable about inflation coming down on its own. At least for now, but it’s difficult to predict the future. 

Remember, there's a new mortgage charter which puts forward some options your lender should give you if you're having trouble making payments."

What does it mean for the housing market? 

That depends. In general, higher interest rates are passed onto borrowers through higher mortgage rates, which can decrease the demand from buyers and push house prices down — so mortgage rates not going up could be encouraging news for buyers and make bring up demand.

But recent headlines have been filled with stories of falling house prices — and sellers having to cut asking prices at the highest rate in a decade. And many think that we're just seeing the start of this slide and prices may continue to fall.

Will they continue to slide? Will interest rates holding steady raise confidence in the housing market? 

The truth is, we’ll have to wait and see. 

What does it mean for my mortgage? 

That may depend on your mortgage. If your rate is locked in (often known as a “fixed” mortgage), then it won’t mean anything — your rate should stay exactly the same. If you have a variable rate, then rates staying the same probably means you won’t notice any changes either. 

But if your current rate is due to expire soon, you may find that your payments are going up — not because of any Bank of England announcement, but because rates often rise if you move from a fixed rate to a standard variable one. 

So even though they haven’t raised base rates, if you fixed your mortgage a long time ago you may still find that rates have gone up. If you’re worried about your mortgage or want to see if there’s a way to reduce your payments, you can always get in touch.

What’s next? 

We wish we knew. We don't know what's coming next — but we do know we can be here to talk you through it. The Bank of England sets rates 8 times a year, so we'll be back soon with the next update. But in the meantime, we're always here if you need us.