Global economic shifts might not be top of mind if you already have a mortgage. But they can have a direct impact on your monthly payments. One such shift making headlines is U.S. President Donald Trump’s announcement of global tariffs, including a 10% charge on UK imports. This kind of move has ripple effects that could influence what you pay for your mortgage.
Why Tariffs Matter
At first glance, tariffs might seem like a distant political issue, but they can quickly affect everyday costs. When global trade is disrupted, the price of goods often rise, including imported products and raw materials. If prices rise too fast, inflation increases, and that’s where the Bank of England steps in.
The Bank of England controls the UK’s base interest rate, which heavily influences how much households pay to borrow money. From mortgages to personal loans and credit cards, higher interest rates could mean higher monthly mortgage payments for many borrowers.
What’s Happening with Rates Right Now?
The current UK base rate (April 2025) sits at 4.5%, and until recently, economists expected it to fall, possibly to 4% by the end of the year. In fact, four interest rate cuts were on the cards, potentially dropping rates to 3.5% by 2026. But if global tariffs raise prices, those rate cuts may not materialise. The Bank of England could keep rates higher for longer in a bid to control rising costs, which means mortgage rates could also remain higher than expected.
What Can You Do as a Homeowner?
If you’re on a variable-rate mortgage, or your fixed term is coming to an end, staying informed about global economic changes is wise. You might want to consider locking in a fixed-rate deal if you’re worried about rates remaining high.
To help you understand how global events could impact your mortgage and guide you through your options, get in touch today.
If you’d like to discuss the options available to you, contact us.