Bank of England Holds Base Rate at 4.00%

Bank of England Holds Base Rate at 4.00% - What It Means for Mortgage Borrowers

The Bank of England has held the base rate at 4.00%. Find out what this means for mortgage holders, first-time buyers, and those remortgaging - plus what could happen next for UK interest rates.

Bank of England Base Rate Remains at 4.00%

The Bank of England’s Monetary Policy Committee (MPC) has voted to hold the UK base rate at 4.00% - maintaining its cautious stance as inflation remains above target and economic growth stalls.

While the decision was widely expected, it carries major implications for mortgage borrowers, homebuyers, and anyone planning to remortgage in the next year.

Why the Bank of England Held the Base Rate

Despite progress in lowering inflation, the BoE remains concerned about lingering price pressures.

Inflation is currently around 3.8%, still well above the 2% target.
Wage growth continues to fuel inflationary risks.
The UK economy is showing signs of weakness, with flat GDP growth and slowing consumer spending.

In short, the Bank wants to avoid cutting too early and reigniting inflation - but also doesn’t want to push the economy into recession. Holding at 4.00% keeps the balance between stability and caution.

What This Means for Mortgage Borrowers

Tracker and Variable-Rate Mortgages

If you’re on a tracker or variable-rate mortgage, your monthly repayments will remain unchanged - for now.
However, interest costs remain much higher than before 2022, and rate cuts are unlikely in the short term. Borrowers should plan for elevated repayments through 2025 and possibly into 2026.

Fixed-Rate Mortgages

Even though the base rate hasn’t changed, fixed-rate mortgage pricing depends on swap rates - market indicators that reflect expectations of future BoE decisions.

Lenders have made small reductions in some fixed-rate deals.
The best 5-year fixed deals are now hovering around the mid-4% range, depending on loan-to-value.
The outlook remains uncertain, so those nearing the end of their fixed deal should start exploring remortgage options early.

First-Time Buyers and Remortgagers

For first-time buyers, this rate hold means relative stability in borrowing costs, but it’s not yet time to expect major rate drops.

Remortgagers should act early - ideally six months before their current deal expires - to secure competitive rates. Working with a mortgage broker can make a big difference in finding the best offers as markets fluctuate.

What Could Happen Next with UK Interest Rates

The BoE has been clear: rate cuts will only come once inflation is firmly under control. Markets currently expect the first cuts to begin in mid-2026, though this could shift depending on economic data.

Key indicators to watch include:

Inflation, particularly in services
Wage growth and unemployment rates
Market swap rates, which directly affect fixed-rate mortgage pricing

If inflation continues to cool and the economy slows further, gradual rate cuts could begin. But the Bank of England is prioritising long-term stability over short-term relief.

Key Takeaways for UK Mortgage Borrowers

Base rate unchanged at 4.00% following the latest MPC meeting
No change for tracker or variable-rate mortgage repayments
Fixed-rate mortgage rates may edge down slightly as markets adjust
Rate cuts are expected to be gradual - not immediate
Borrowers should budget for higher repayments throughout 2025

Final Thoughts

The Bank of England’s decision to hold the base rate at 4.00% signals a steady but cautious phase for the UK economy.

For mortgage borrowers, this means stability at elevated levels - and the importance of preparation over panic. Whether you’re buying, remortgaging, or simply reviewing your finances, staying informed about inflation trends and lender movements will be key to making smart mortgage decisions in the months ahead.

Ready to continue the conversation? Click here to contact us.

Check out our other blog posts here!

< Older Post

Newer Post >

Bank of England Cuts Base Rate to 3.75% – What It Means for Mortgage Borrowers

By Jordan Nasser • December 21, 2025

Bank of England Cuts Base Rate to 3.75% - What It Means for Mortgage Borrowers On 18 December 2025 , the Bank of England (BoE) delivered a 0.25% cut to the official base rate , reducing it from 4.00% to 3.75% . This move marks the first reduction since November and aims to provide some support to a slowing UK economy amid easing inflation. What Has Changed? Bank Rate is now 3.75% The Bank’s Monetary Policy Committee (MPC) voted, by a narrow majority, to lower the base rate by a quarter percentage point in response to slowing inflation and softer economic data. This reduction is part of a broader trend of rate cuts seen through 2025 as price growth continues to ease and policymakers look to support growth. What This Means for Mortgage Borrowers Tracker & Variable-Rate Mortgages If you’re on a tracker mortgage or a standard variable rate (SVR) , this cut should feed through into lower monthly repayments- albeit not immediately. Lenders typically adjust their variable products to reflect changes in the base rate, so you may see your monthly payment fall over the coming weeks as lenders update pricing. Fixed-Rate Mortgages For many borrowers on fixed-rate mortgages , your current deal won’t change until it ends. However, new fixed rates are likely to soften , especially on shorter-term products , as competition increases and markets price in the lower Bank Rate. Brokers are already seeing some fixed rates drop nearer to pre-pandemic levels as lenders compete. Remortgagors & Those Coming Off Deals If your fixed deal is expiring soon , this cut could mean more attractive remortgage options - but acting early remains key. It’s worth starting your remortgage search three to six months before your deal ends to capture improving pricing. A lower base rate doesn’t guarantee the lowest deal forever, but markets have responded positively and lenders are reacting. What This Means for the Wider Market Housing Activity Lower borrowing costs can help stimulate housing demand , particularly for first-time buyers and homeowners looking to move or remortgage. Industry commentators are already noting a price-war environment among lenders , which could push two- and five-year fixed rates lower in the weeks ahead . Savers & Other Borrowers If you’re saving money, this cut could see interest rates on savings accounts drift down , as banks and building societies adjust rates across the board. Credit card and unsecured loan rates may also fall, but usually with a lag after base-rate changes. Should You Do Anything Now? Here are a few practical points to consider: ✔️ Review your mortgage deal if it’s nearing expiry - use this cut to compare options now rather than waiting. ✔️ Contact a broker if you’re on a tracker/SVR to understand when your lender updates your rate. ✔️ Don’t delay if you’re planning a purchase - softer pricing could mean better borrowing costs this side of Christmas and into 2026. ✔️ Keep an eye on markets - further base-rate moves aren’t ruled out next year, depending on inflation and economic data. Final Thoughts The BoE’s move to 3.75% is good news for borrowers - particularly those already on variable products or nearing a remortgage. But while cheaper borrowing costs are welcome, the broader economic backdrop remains cautious, and lenders will continue to price risk into mortgage deals . Staying informed and proactive will help you make the most of this easing cycle.

December Prize Draw Winner Announcement

By Jordan Nasser • December 16, 2025

🎉December Prize Draw Winner Announcement🎉 We’re delighted to announce the winner of our Google Review prize draw - congratulations to Dr Adam Richardson, who has won a brand-new pair of AirPods! 🎧 Thank you to everyone who took part and helped make our December draw such a success. We really appreciate the time you take to share your feedback and support us. Missed giving us a review? Don’t panic! If you didn’t get a chance to enter last time, there’s still plenty to play for. We’re running another competition, with the chance to win a pair of AirPods Pro 3. 📅 The next winner will be drawn on 30th April, so there’s still time to get involved. 👉 Click here to leave your review and enter the draw Good luck - and once again, congratulations to Dr Adam Richardson! 🙌

The Budget and Your Properties/Mortgage

By Jordan Nasser • December 14, 2025

Podcast with Dentists Who Invest – Featuring Sarah Grace | CPD Available In this episode, we discuss how the UK Government’s latest budget changes affect property owners and mortgage holders - especially dentists and small landlords. We explore how shifts in tax bands, interest tax credits, and mortgage pricing are influencing property investment strategies, rental returns, and borrowing decisions. We also share practical tips on approaching fixed-rate mortgage deals and preparing the right documentation, whether you’re remortgaging, buying a home, or considering buy-to-let. 📌 Key takeaways: 📉 Interest rates: Fixed rates (2 and 5-year deals) are easing as markets digest the budget, but uncertainty remains. 💸 Tax impact: Changes in tax bands and interest tax credits can pull more rental income into higher rates. 🔑 Strategy tip: If your current mortgage fix is ending soon, consider securing a product now to cap risk and switch later if prices fall. 🧠 Practical guidance: Covers what documents to gather and how to choose between mortgage terms. 📍 For higher-value homes: Be aware of proposed mansion tax bands and valuation timing ahead of 2028. ➡️ Great listen if you’re navigating property finance in the current UK market! 🎧 Listen now : The Budget And Your Properties/Mortgage 📝 CPD Certificate Available : This episode is eligible for verified CPD, making it a valuable use of your time both personally and professionally.