Bank of England base rate increase - how to save money

Those with variable mortgages could end up paying more after the Bank of England base rate increase last week.

The Bank of England last week agreed to raise the base rate for the first time in ten years.

But just what does the move mean for you?

Moneysupermarket's money expert Sally Francis has put together some guidance on how people might be affected. For those with variable mortgages, the base rate rise might lead to higher monthly repayments, so here are Sally's top tips:

Cheaper mortgage - If you’re on a variable rate mortgage, you could switch to a cheaper deal. But you might incur fees and charges, so work out whether it’s really going to save you money

Offset option - You could ask your lender about ‘offsetting’ your mortgage. This is where your savings and current account are stacked up against what you owe, and you’re only charged interest on the balance. Mortgage = £200,000, savings = £15,000 – you pay interest on £185,000

Switch energy - If you’ve never switched provider or haven’t done so for several years, you’re probably on a standard variable rate tariff. Switching to a fixed rate deal could save you hundreds of pounds a year

Don’t auto renew - Car and home insurers love it when you renew with them. Instead of rewarding your loyalty they often punish you with a price hike. So be a new customer every year and get the best deal in the market.

Max your bank account - Been with the same bank for years? There’s a new breed of current account that pays interest or gives rewards for certain types of spending. And you might get a £100+ cash incentive to switch.

More from News