lowest rate of interest a bank will charge and on which they calculate the rate of interest for all loans The Bank of England recently announced its decision to increase the base rate by 0.25%, raising it to 4.75%.
- The interest for the loan shall be the base rate plus 4 per cent.
- Banks will respond to a base rate increase with a raise in their mortgage rates.
- Interest on arrears will be payable at the base rate applicable on the due date.
- The prime rate is the interest rate that commercial banks charge their most creditworthy borrowers (=a borrower that has enough assets for banks and other organisations to be willing to lend them money eg a large company).