Bank of England Base Rate expected to rise

Bank of England has indicated that its Base Rate may increase in August, and again later in the year.

Although we don’t know for sure, we expect it to rise by 0.25 per cent to 0.75 per cent overall.

What could this mean for you if you have a mortgage?

If you’re currently on a fixed rate mortgage, then your monthly mortgage repayments will remain the same until the end of your fixed rate period.

If you’re on any Danske mortgage that uses the Danske Bank Base Rate, Standard Variable Rate or Danske Re:pay, then your repayments will go up, but not necessarily by 0.25 per cent.

We’ll publish all changes on our website after the announcement.

Here’s a straightforward example of the effect on mortgage repayments

Let’s say you borrow £100,000 from us when you take out your mortgage, and you’re repaying it over 25 years. With the current interest rate, your repayments will be £532.26.

If the base rate goes up by a quarter of a percentage point (0.25 per cent), as expected, your repayments would rise to £546.14, an increase of £13.88 per month.

We will tell you in writing of changes to your mortgage repayments if the base rate increases.

What if you have a Variable Rate Personal Loan or overdraft on your personal current account?

An increase in the base rate will also result in a change to overdraft and Variable Rate Personal Loans - these will be published on our website after the change is announced.

If you have a Fixed Rate Personal Loan, there will be no change to your repayments.

Do you feel you might struggle if the base rate increases?

If so, please call us on 0345 606 0573, or visit your local Danske branch.