What would an interest rate hike mean for your finances?

Last post: Jul 25, 2018

The Bank of England is expected to raise interest rates on 2nd August 2018. These big decisions may seem distant, but they can have a big impact on household finances. What will an interest rate rise mean for your money?

When big, top level financial decisions are made over at the Bank of England, it's easy to feel like they won't affect us. However, when it comes to interest rates, all of the tweaks and changes the money-men & -women make have an impact on our household finances.

On 2nd August 2018, the Bank of England is likely to raise interest rates. But what will this mean for you and your money? We've broken it down for you, so you can be in the know before it hits your bank balance…


Interest rates have big impact on savings. For many years now, savings have been very meagre as interest rates have been at rock bottom. Unfortunately, an interest rate rise this August probably won't do much to boost your savings (especially if you're using an instant access savings account with an interest rate of around 0.05%). This is because any interest rate we see is likely to be very small and because banks are not the best when it comes to passing these savings onto customers.


If you're on a tracker mortgage or a variable mortgage, an interest rate rise will mean you'll be paying a little more towards your mortgage with each repayment. Once fixed deals end, you may also find yourself shouldering higher repayments. Those on the hunt for a mortgage may find the "rock bottom" rates we've seen in recent years much more difficult to obtain.


Households with debts are also likely to see repayments increase as the interest rate rises. With many households overspending in 2017, this may mean many families will be forced to budget a little harder to shoulder repayments.

At Choice Personal Loans we connect customers with the right financial products for their unique circumstances. To find the best fit loans and mortgages for you, contact our finance experts today.