The minimum lending rate was abolished in 1981, and so the banks introduced the base rate, used to refer to the mortgage lender's standard variable rate.
Many mortgage products are based on the base rate, as are many financial arrangements. Therefore, as the base rate rises so does the cost of borrowing.
A tracker mortgage for example may track the Bank of England Base Rate and remain a couple of percent above it. Therefore the mortgage rate will have a linear relationship with the movements of the base rate
Ther are other rates that borrowing can be based on. For example the libor rate is sometimes used as the basis for movement of rates.
A Fixed rate mortgage can be a way to avoid being stung by fluctuations in the base rate. These products remain at a fixed interest rate for a period of time to enable borrowers to know exactly what they are paying. In general these are advisable if you think the base rate is going to incease thus raising the cost of borrowing.
