How Bank of England base-rate changes hit your repayments

The chain from the MPC to your bank account

The base rate is set by the Monetary Policy Committee. It anchors the reference rate your facility floats on. A tracker passes the change through in full; a standard variable rate may pass it through partially or slowly — see rate pass-through.

What a 0.25% rise costs you

On a £100,000 balance, a 0.25% rise adds roughly £250 a year in interest, or about £21 a month, before the reducing balance is accounted for. A 1% rise adds around £1,000 a year. The exact figure depends on the amortisation profile and your remaining term.

Fixed loans are insulated — until they are not

A fixed-rate period shields you from base-rate moves while it lasts. But when it ends you roll onto the reversion rate, which reflects wherever rates have got to — a jump if base rates have climbed.

Prepare with a stress test

Model a rise before it happens. Enter your loan below and try the payment at base +1% and +2% so a real move holds no surprises.

Where Credicorp fits

Credicorp lends to your company, not to you personally, and takes no personal guarantee. See indicative terms on business loans, or apply online in minutes.

See how to stress-test a loan against rate rises and the answer on what happens if interest rates rise.