A Guide to Preparing Yourself for an Interest Rate Rise

Published Dec 2023

Welcome to the fascinating finance realm, where you’ll learn about your hard-earned money. Managing your finances can significantly affect your success, whether saving for a home or planning your retirement. It also means staying updated with the latest trends and news. 

Besides the economic indicators and market trends, one of the crucial aspects you should watch out for is an interest rate rise. It can affect various aspects like mortgages, pensions, borrowing, and savings. It can also determine the interest earned from savings and the interest charged on borrowed money.

If you’re serious about protecting your finances for the long term, this article will define interest rate rises and how to prepare for them. 

What’s an Interest Rate Rise? 

The Bank of England’s (BoE) Monetary Policy Committee (MPC) determines the UK’s interest rates. This rate is where financial institutions can borrow funds from the Bank of England.

What Happens When There’s an Increase in Interest Rates?

Although the Bank of England doesn’t require financial institutions to adhere to their interest rate rulings, they can impact the interest earned on savings or borrowing costs. 

What Is the Effect of Increased Interest Rates on Mortgages?

The effect of changing interest rates on mortgage repayments depends on the mortgage type and when the current deal ends. Variable-rate mortgages will immediately feel the results, while the rising interest rates will affect fixed-rate mortgages after the agreement. Also, remortgaging could become costlier for those on fixed-rate mortgages if an interest rate rises.

Why Is It Helpful to Have a Financial Plan? 

A solid financial strategy can help handle the possibility of interest rate shifts. The steadily rising base rate indicates that you may need to brace yourself for increased monthly expenses if you apply for a new mortgage, refinance from a fixed rate, or have a tracker or variable rate mortgage.

6 Tips to Manage a Rising Interest Rate on Your Mortgage

After defining increasing base rates, their impact, and the significance of a financial plan, here are seven tips to help you handle this rising trend on your mortgage.

1. Determine Your Mortgage Product

Your mortgage type and when it expires will determine how an increase in interest rates affects you. Review your records or consult a mortgage advisor to obtain the necessary information if uncertain. 

2. Know How the Interest Rate Rise Will Affect You

Once you understand your mortgage type, you can determine how it will impact your finances and when you can expect to experience financial changes.

3. Know What You Can Afford 

Check if you can afford higher mortgage repayments and create a budget to check if you can cut back. If you can expect increases, start saving to prepare for them.

4. Overpay Your Mortgage 

Maximise the current low-interest rates and pay extra on your mortgage before a potential rate rises. Also, check with your mortgage provider about limits or charges for overpaying.

5. Ensure You’re on the Best Deal

Even if your current deal hasn’t ended, it’s best to consider switching to a better one to save money. Though initially costly, the potential savings can make it worthwhile.

6. Contact Your Lender 

If you’re concerned about mortgage repayment, discuss it with your lender to find a solution.


Rising interest rates can be daunting for anyone, but it’s best to prepare for this trend to ensure financial stability. You can safeguard your finances by creating a financial plan and consulting a reputable mortgage adviser. 

BeAdvised is your trusted mortgage adviser in Swindon, ready to help you make more informed financial decisions, especially during an interest rate rise. Reach us now!


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