Who Decides Your Mortgage Rate? A Quick Guide for Buyers & Sellers!
Mortgage rates are a hot topic—but who actually sets them? If you’re buying or selling in South Tyneside, understanding how mortgage rates work can help you plan smarter.
Let’s break it down 👇
🔄 The Bank Rate vs Your Mortgage Rate
They sound similar, but they’re not the same.
The Bank Rate (or base rate) is set by the Bank of England.
Your mortgage rate is set by your chosen lender—like a bank, building society, or mortgage provider.
While the Bank Rate can influence mortgage rates, your lender makes the final call.
💼 Who Sets the Bank Rate?
The Bank of England uses the Bank Rate to help manage inflation and the economy. When inflation is high, they might increase the rate. When they want to stimulate spending, they might lower it.
This decision is made by the Monetary Policy Committee (MPC)—a group of nine economic experts who meet eight times a year to assess the UK and global economy before voting on rate changes.
🏡 Who Sets Your Mortgage Rate?
Your mortgage rate is set by your lender—and it's based on several factors, including:
The current Bank Rate (and where it might go)
Their business strategy and competition
The type of property you're buying
Your deposit size (Loan-to-Value ratio)
Your credit score and financial history
So, two buyers in East Yorkshire could receive very different rates, even on similar homes.
🔍 Types of Mortgages & How They React to the Bank Rate
Variable Rate Mortgages – Your lender can change the rate at any time, and it may (or may not) follow the Bank Rate.
Fixed-Rate Mortgages – Your rate stays the same for a set term (e.g., 2 or 5 years), unaffected by changes to the Bank Rate.
Tracker Mortgages – These directly follow the Bank Rate, often with a small margin added.
Your choice of mortgage can significantly affect your monthly payments and the total cost of your loan—so it’s crucial to get the right advice.
🤝 Buying or Selling in South Tyneside?
At Browns Estate Agents, we help buyers and sellers across Hull, Beverley, Driffield and surrounding villages understand what shifting mortgage rates mean for their plans.
Whether you’re buying your next home or curious about your current home’s value 📞 contact Browns Estate Agents today for a no-obligation property valuation or a chat about your next move.
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