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Originally Posted by Jerrek
In Canada, the bank rate is 2.25% and the prime rate is 3.25%. I think my parents have their mortgage fixed at prime - 1%, meaning, if interest rates go up, their interest rate will go up too.
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The Bank of England sets a base rate (currently 4.25%). Mortgages are at rates greater than the base rate, savings at rates lower than the base rate.
For example Nationwide (the county's largest Building Society) has the following mortgages available:
Base Mortgage Rate (5.49%) - Guaranteed to be no more than 2% above the Bank of England base rate but can be what ever feel like otherwise.
Tracker (Tracks the BoE Base Rate for a period of 2, 3 or 5 years):
2 Years BR + 0.04% = 4.29%
3 Years BR + 0.14% = 4.39%
5 Years BR + 0.24% = 4.49%
Fixed Rate (for a period of 2, 3 or 5 years):
2 Years 5.34%
3 Years 5.64%
5 Years 5.84%
Nationwide typically have near the lowest ongoing rates available in the UK.