If you’re applying for a first time buyer mortgage in Leicester or preparing to remortgage, the subject of interest rates might be weighing on your mind.

Mortgage rates don’t stay fixed for long, and changes in the market can affect your plans more than you expect.

Whether rates are increasing, falling, or holding steady, understanding what drives these movements can help you prepare for what lies ahead.

What Typically Causes Mortgage Rates to Change?

Mortgage rates are set by individual lenders, but they’re heavily influenced by the Bank of England’s base rate.

When that base rate rises, borrowing becomes more expensive, and lenders usually pass on those costs through higher interest rates.

Inflation plays a part here too. If inflation runs above target, the Bank of England may raise the base rate in response, which can trigger mortgage rate increases shortly after.

At the same time, lenders respond to changes in funding costs, market demand, and the competitive landscape.

These factors combined create a constantly shifting environment, which is why mortgage deals often change with little notice.

How a Rate Increase Might Affect You

If you’re on a fixed-rate mortgage, you won’t notice any difference until your deal ends. Once that happens, your payments could go up if new rates are higher than when you first applied.

This is often the point where people look at remortgage options in Leicester.

Switching early or before your fixed deal ends might help avoid moving onto a standard variable rate which is usually more expensive.

For first time buyers in Leicester, higher rates can reduce your borrowing power. That’s because lenders base affordability on your income against projected repayments.

If repayments rise, the amount you can borrow may fall.

Fixed or Tracker: Which Option Works Best?

Most mortgages fall into one of two categories: fixed-rate or variable. A tracker mortgage follows the base rate, with a fixed margin added on top.

If the base rate goes up, so will your payments. This option can work well during periods of low interest, but it offers less predictability.

Fixed-rate mortgages give you more control over your monthly costs. Your payments stay the same throughout the fixed period, which makes budgeting easier.

That’s especially useful if you’re concerned about rates going up again during your mortgage term.

Can You Lock in a Deal Before Rates Rise?

If your current mortgage is ending soon, or you’re part-way through a fixed term and thinking ahead, it may be possible to secure a new deal early.

Many lenders allow customers to reserve rates up to six months in advance, giving you time to plan without rushing.

This can be useful whether you’re remortgaging or applying as a first time buyer in Leicester.

Locking in now could mean protecting yourself from future increases, especially if you’re aiming for financial stability over the next few years.

Getting Advice When Rates Are Changing

When the market is shifting, choosing the right mortgage becomes even more important.

Interest rate changes don’t just affect your repayments, they can also impact your borrowing limits, product availability, and the value of switching early.

Our mortgage advisors can in Leicester help you explore your options, whether you’re applying for your first mortgage, moving home, or preparing to remortgage.

We compare thousands of products across multiple lenders and guide you through every step of the process.

We’re here to make sure your mortgage fits your circumstances now and supports your plans for the future in Leicester.

Date Last Edited: September 11, 2025