What is the Bank of England base rate?
The Bank of England's (BoE) base rate is the UK's most important interest rate. It's set by the BoE's Monetary Policy Committee, and it determines the interest rate they pay to banks and building societies that hold money with them. That can then influence the interest rates those banks and building societies set for mortgages and savings accounts.
When the Bank of England change the base rate, interest on your savings and mortgage can change as well.
What is the current Bank of England base rate?
The latest Bank of England base rate is 4.50%. This is a decrease of 0.25% of the previous rate and was announced by the BoE on 6th February 2025.
- Savings
What does this mean for our savings customers? We're currently reviewing our rates in light of the recent changes. Rest assured, if this update affects you, we'll contact you with all of the details in advance of any changes being made. - Mortgages
What does this mean for our mortgage customers? Interest rates on our variable rate mortgages will reduce from 1st March 2025. The amount by which rates will reduce depends on the type of mortgage, which we've explained below.
What is the interest rate on my mortgage and how can it be changed?
You can find the type of mortgage you're on and your interest rate by looking on your annual statement or mortgage offer (whichever is the most recent).
The type of rate you are on will determine how a change in the Bank of England base rate or Nottingham Building Society’s variable mortgage rate (VMR) will impact you.
Fixed rate mortgages
There will be no change to your interest rate. Your interest rate and monthly payments are fixed until the end of your deal period.
Tracker mortgages
If you have a tracker mortgage, your interest rate will go up and down in line with the Bank of England base rate, meaning we’ll be decreasing your interest rate from 1st March 2025.
We'll write to let you know what your new interest rate and monthly payments will be, and you'll start paying your new monthly amount from March 2025, on your usual payment date.
Variable mortgage rate mortgages
This includes customers with a discounted variable rate product and customers whose product has expired. Our variable mortgage rates are not directly linked to the Bank of England base rate, although the Base Rate is one of several factors we consider when setting our variable mortgage rates.
Any changes will be communicated to you and a letter will explain your new interest rate and monthly payments.
If you're at the end of your current deal, or your product has expired, you can switch to a new one. We'll write to you to explain your switching options.
How to switch mortgage deal?
Find out how you can switch your mortgage deal.
In arrears or on a payment plan?
When we adjust your monthly payments, this won't include the repayment of any outstanding arrears – you’ll need to pay these separately.
If you're already on an agreed payment plan to pay off your arrears, the agreed monthly amount won't be affected by the base rate change.
Are you worried about paying?
Find out how we can help if you’re worried that you’ll struggle with paying your mortgage.