A look at the history of the base rate of interest

By Lauren Burns

The decision of the Monetary Policy Committee to increase the base rate of interest to 0.75 per cent has been reported in dramatic headlines - 'Only the second rate rise in a decade' - 'Interest rates at their highest level since 2009'.

While of course they are entirely correct statistics, they do perhaps create an idea of a seismic shift that mortgage borrowers and savers won't actually see in real terms. It is important to remember the history of the base rate to understand why the increase has been reported in such dramatic fashion, but also to understand that we are still very much living in the age of historically low interest rates.

You have to go back to September 1991 to get to a time when the base rate of interest was changed to double figures - 10.375 per cent to be precise. It fluctuated over the next decade but didn't fall to below 5 per cent until September 2001. Below is a history of the rate change, but it can be seen that with a few exceptions, mortgage borrowers and savers lived with an interest rate of 4 per cent or higher for over 30 years.

 

It wasn't until 2008 that the base rate dropped to 3 per cent and then 2 per cent. In March 2009 it was dropped to 0.5 per cent where it stayed for over 7 years before falling to 0.25 per cent in August 2016. It is against that backdrop that two more interest rate rises should be viewed to remember that mortgage borrowers are still benefitting from historically low interest rates. That is not to undermine of course the fact that mortgage borrowers on a tracker rate mortgage product will see their monthly mortgage payments increase.

Thankfully, two thirds of mortgage borrowers are on fixed rate mortgage deals and will not see any change as a result of the interest rate increase. Those home owners who do have a tracker product will see their monthly mortgage payments increase by a modest amount depending on the size of the initial loan. So for example, someone with a £100,000 repayment mortgage will pay around an extra £12 per month.

The main concern that mortgage borrowers might have is that the recent change is the first of many to come, though the language used by the Bank of England suggests we might not see any further increases until sometime next year. It is however expected that many mortgage borrowers on a tracker product will be encouraged by the August rate rise to remortgage their property to get on to a fixed rate deal before lenders start to increase their own rates, and before any further increases to the base rate.

If you are buying a property in Northern Ireland, or selling or remortgaging an existing house, contact one of the property conveyancing solicitors in Wilson Nesbitt for information or advice by clicking here.

HISTORY OF BASE RATE OF INTEREST CHANGES

DATE OF CHANGE

 

RATE

Thu, 02 Aug 2018

       

0.7500

Thu, 02 Nov 2017

 

0.5000

Thu, 04 Aug 2016

 

0.2500

Thu, 05 Mar 2009

 

0.5000

Thu, 05 Feb 2009

 

1.0000

Thu, 08 Jan 2009

 

1.5000

Thu, 04 Dec 2008

 

2.0000

Thu, 06 Nov 2008

 

3.0000

Wed, 08 Oct 2008

 

4.5000

Thu, 10 Apr 2008

 

5.0000

Thu, 07 Feb 2008

 

5.2500

Thu, 06 Dec 2007

 

5.5000

Thu, 05 Jul 2007

 

5.7500

Thu, 10 May 2007

 

5.5000

Thu, 11 Jan 2007

 

5.2500

Thu, 09 Nov 2006

 

5.0000

Thu, 03 Aug 2006

 

4.7500

Thu, 04 Aug 2005

 

4.5000

Thu, 05 Aug 2004

 

4.7500

Thu, 10 Jun 2004

 

4.5000

Thu, 06 May 2004

 

4.2500

Thu, 05 Feb 2004

 

4.0000

Thu, 06 Nov 2003

 

3.7500

Thu, 10 Jul 2003

 

3.5000

Thu, 06 Feb 2003

 

3.7500

Thu, 08 Nov 2001

 

4.0000

Thu, 04 Oct 2001

 

4.5000

Tue, 18 Sep 2001

 

4.7500

Thu, 02 Aug 2001

 

5.0000

Thu, 10 May 2001

 

5.2500

Thu, 05 Apr 2001

 

5.5000

Thu, 08 Feb 2001

 

5.7500

Thu, 10 Feb 2000

 

6.0000

Thu, 13 Jan 2000

 

5.7500

Thu, 04 Nov 1999

 

5.5000

Wed, 08 Sep 1999

 

5.2500

Thu, 10 Jun 1999

 

5.0000

Thu, 08 Apr 1999

 

5.2500

Thu, 04 Feb 1999

 

5.5000

Thu, 07 Jan 1999

 

6.0000

Thu, 10 Dec 1998

 

6.2500

Thu, 05 Nov 1998

 

6.7500

Thu, 08 Oct 1998

 

7.2500

Thu, 04 Jun 1998

 

7.5000

Thu, 06 Nov 1997

 

7.2500

Thu, 07 Aug 1997

 

7.0000

Thu, 10 Jul 1997

 

6.7500

Fri, 06 Jun 1997

 

6.5000

Tue, 06 May 1997

 

6.2500

Wed, 30 Oct 1996

 

5.9375

Thu, 06 Jun 1996

 

5.6875

Fri, 08 Mar 1996

 

5.9375

Thu, 18 Jan 1996

 

6.1250

Wed, 13 Dec 1995

 

6.3750

Thu, 02 Feb 1995

 

6.6250

Wed, 07 Dec 1994

 

6.1250

Mon, 12 Sep 1994

 

5.6250

Tue, 08 Feb 1994

 

5.1250

Tue, 23 Nov 1993

 

5.3750

Tue, 26 Jan 1993

 

5.8750

Fri, 13 Nov 1992

 

6.8750

Fri, 16 Oct 1992

 

7.8750

Tue, 22 Sep 1992

 

8.8750

Tue, 05 May 1992

 

9.8750

Wed, 04 Sep 1991

 

10.3750

Fri, 12 Jul 1991

 

10.8750

Fri, 24 May 1991

 

11.3750

Fri, 12 Apr 1991

 

11.8750

Fri, 22 Mar 1991

 

12.3750

Wed, 27 Feb 1991

 

12.8750

Wed, 13 Feb 1991

 

13.3750

Mon, 08 Oct 1990

 

13.8750

Fri, 06 Oct 1989

 

14.8750

Fri, 08 Sep 1989

 

13.7500

Mon, 04 Sep 1989

 

13.8750

Thu, 31 Aug 1989

 

13.8438

Thu, 25 May 1989

 

13.7500

Fri, 25 Nov 1988

 

12.8750

Thu, 25 Aug 1988

 

11.8750

Mon, 08 Aug 1988

 

10.8750

Thu, 21 Jul 1988

 

10.3750

Thu, 07 Jul 1988

 

9.8750

Fri, 24 Jun 1988

 

8.8750

Fri, 10 Jun 1988

 

8.3750

Fri, 03 Jun 1988

 

7.8750

Tue, 17 May 1988

 

7.3750

Fri, 08 Apr 1988

 

7.8750

Thu, 17 Mar 1988

 

8.3750

Mon, 01 Feb 1988

 

8.8750

Thu, 03 Dec 1987

 

8.3750

Wed, 04 Nov 1987

 

8.8750

Fri, 23 Oct 1987

 

9.3750

Thu, 06 Aug 1987

 

9.8750

Fri, 08 May 1987

 

8.8750

Tue, 28 Apr 1987

 

9.3750

Wed, 18 Mar 1987

 

9.8750

Mon, 09 Mar 1987

 

10.3750

Wed, 15 Oct 1986

 

10.8750

Fri, 23 May 1986

 

9.8750

Fri, 18 Apr 1986

 

10.3750

Fri, 11 Apr 1986

 

10.8750

Wed, 19 Mar 1986

 

11.3750

Wed, 15 Jan 1986

 

12.3750

Fri, 26 Jul 1985

 

11.3750

Thu, 11 Jul 1985

 

11.8750

Fri, 19 Apr 1985

 

12.3750

Thu, 28 Mar 1985

 

12.8750

Wed, 20 Mar 1985

 

13.3750

Mon, 28 Jan 1985

 

13.8750

Mon, 14 Jan 1985

 

11.8750

Fri, 23 Nov 1984

 

9.5000

Mon, 19 Nov 1984

 

9.7500

Mon, 05 Nov 1984

 

10.0000

Fri, 17 Aug 1984

 

10.5000

Thu, 16 Aug 1984

 

10.7500

Thu, 09 Aug 1984

 

11.0000

Wed, 08 Aug 1984

 

11.5000

Wed, 11 Jul 1984

 

12.0000

Fri, 06 Jul 1984

 

10.0000

Fri, 29 Jun 1984

 

8.8750

Thu, 10 May 1984

 

9.0625

Wed, 14 Mar 1984

 

8.5625

Wed, 07 Mar 1984

 

8.8125

Mon, 03 Oct 1983

 

9.0625

Wed, 10 Aug 1983

 

9.5625

Tue, 09 Aug 1983

 

9.4375

Tue, 14 Jun 1983

 

9.5625

Mon, 13 Jun 1983

 

9.8125

Thu, 14 Apr 1983

 

10.0625

Wed, 13 Apr 1983

 

10.3125

Tue, 15 Mar 1983

 

10.5625

Wed, 12 Jan 1983

 

11.0000

Fri, 26 Nov 1982

 

10.0000

Tue, 02 Nov 1982

 

9.1250

Mon, 01 Nov 1982

 

9.3750

Tue, 12 Oct 1982

 

9.6250

Thu, 30 Sep 1982

 

10.1250

Wed, 29 Sep 1982

 

10.2500

Tue, 28 Sep 1982

 

10.3750

Mon, 27 Sep 1982

 

10.5000

Fri, 27 Aug 1982

 

10.6250

Thu, 26 Aug 1982

 

10.8750

Wed, 25 Aug 1982

 

11.0000

Tue, 24 Aug 1982

 

11.1250

Tue, 17 Aug 1982

 

11.2500

Mon, 16 Aug 1982

 

11.3750

Wed, 04 Aug 1982

 

11.5000

Mon, 02 Aug 1982

 

11.5625

Fri, 30 Jul 1982

 

11.6250

Thu, 29 Jul 1982

 

11.7500

Wed, 28 Jul 1982

 

11.8125

Mon, 26 Jul 1982

 

11.9375

Wed, 21 Jul 1982

 

12.0625

Tue, 13 Jul 1982

 

12.1250

Mon, 12 Jul 1982

 

12.2500

Fri, 09 Jul 1982

 

12.5000

Tue, 08 Jun 1982

 

12.6250

Tue, 20 Apr 1982

 

13.1250

Mon, 19 Apr 1982

 

13.0000

Fri, 16 Apr 1982

 

13.1250

Wed, 10 Mar 1982

 

13.2500

Thu, 25 Feb 1982

 

13.6250

Mon, 22 Feb 1982

 

13.8125

Fri, 22 Jan 1982

 

13.8750

Thu, 21 Jan 1982

 

14.0000

Wed, 20 Jan 1982

 

14.1250

Tue, 19 Jan 1982

 

14.2500

Mon, 18 Jan 1982

 

14.3125

Fri, 04 Dec 1981

 

14.3750

Wed, 25 Nov 1981

 

14.5625

Mon, 09 Nov 1981

 

14.6250

Fri, 06 Nov 1981

 

15.0625

Wed, 28 Oct 1981

 

15.1250

Mon, 12 Oct 1981

 

15.0000

Tue, 15 Sep 1981

 

14.0000

Tue, 25 Aug 1981

 

12.6875

Wed, 11 Mar 1981

 

12.0000

Tue, 25 Nov 1980

 

14.0000

Thu, 03 Jul 1980

 

16.0000

Thu, 15 Nov 1979

 

17.0000

Wed, 13 Jun 1979

 

14.0000

Thu, 05 Apr 1979

 

12.0000

Thu, 01 Mar 1979

 

13.0000

Thu, 08 Feb 1979

 

14.0000

Thu, 09 Nov 1978

 

12.5000

Thu, 08 Jun 1978

 

10.0000

Mon, 15 May 1978

 

9.0000

Mon, 08 May 1978

 

8.7500

Wed, 12 Apr 1978

 

7.5000

Mon, 09 Jan 1978

 

6.5000

Mon, 28 Nov 1977

 

7.0000

Mon, 17 Oct 1977

 

5.0000

Mon, 10 Oct 1977

 

5.5000

Mon, 19 Sep 1977

 

6.0000

Mon, 12 Sep 1977

 

6.5000

Mon, 15 Aug 1977

 

7.0000

Mon, 08 Aug 1977

 

7.5000

Mon, 16 May 1977

 

8.0000

Mon, 02 May 1977

 

8.2500

Mon, 25 Apr 1977

 

8.7500

Mon, 18 Apr 1977

 

9.0000

Tue, 12 Apr 1977

 

9.2500

Thu, 31 Mar 1977

 

9.5000

Mon, 21 Mar 1977

 

10.5000

Thu, 10 Mar 1977

 

11.0000

Thu, 03 Feb 1977

 

12.0000

Mon, 31 Jan 1977

 

12.2500

Mon, 24 Jan 1977

 

13.2500

Mon, 10 Jan 1977

 

14.0000

Wed, 29 Dec 1976

 

14.2500

Mon, 20 Dec 1976

 

14.5000

Mon, 22 Nov 1976

 

14.7500

Thu, 07 Oct 1976

 

15.0000

Mon, 13 Sep 1976

 

13.0000

Mon, 24 May 1976

 

11.5000

Mon, 26 Apr 1976

 

10.5000

Mon, 08 Mar 1976

 

9.0000

Mon, 01 Mar 1976

 

9.2500

Mon, 09 Feb 1976

 

9.5000

Mon, 02 Feb 1976

 

10.0000

Mon, 26 Jan 1976

 

10.5000

Mon, 19 Jan 1976

 

10.7500

Mon, 05 Jan 1976

 

11.0000

Mon, 29 Dec 1975

 

11.2500

Mon, 01 Dec 1975

 

11.5000

Mon, 17 Nov 1975

 

11.7500

Mon, 06 Oct 1975

 

12.0000

Mon, 28 Jul 1975

 

11.0000

Mon, 05 May 1975

 

10.0000

Mon, 21 Apr 1975

 

9.7500

Mon, 24 Mar 1975

 

10.0000

Mon, 10 Mar 1975

 

10.2500

Mon, 17 Feb 1975

 

10.5000

Mon, 10 Feb 1975

 

10.7500

Mon, 27 Jan 1975

 

11.0000

Mon, 20 Jan 1975

 

11.2500