BANK OF ENGLAND BASE RATE EXPLAINED

THE BANK OF ENGLAND BASE RATE IS 3.75%

Discover how the base rate could affect your mortgage payments. 

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THE BANK OF ENGLAND BASE RATE EXPLAINED 

The Bank of England (BoE) Base Rate is a key factor in determining the cost of borrowing money. It is set by the BoE's Monetary Policy Committee every six to seven weeks. Mortgage lenders use this rate as a guide when setting their own interest rates for borrowers. 

When the committee meets, they can choose to increase, decrease, or maintain the current base rate. Generally: 

• An increase in the base rate tends to raise borrowing costs. 

• A decrease in the base rate often leads to more affordable borrowing. 

The current base rate is 3.75% (correct at 19/03/26), and the next base rate decision will be on 30/04/26.

HOW DOES THE BASE RATE AFFECT YOUR MORTGAGE? 

For new mortgages: 

The current base rate influences the mortgage interest rates available to new buyers. A higher base rate typically means more expensive mortgage products, while a lower base rate can lead to more competitive, affordable options. 

For existing mortgages: 

The impact on your monthly repayments depends on your mortgage type: 

• Fixed Rate mortgages: Your payments remain unchanged during the fixed term, regardless of base rate fluctuations. It may be worth reviewing your options as your fixed term nears its end, however, keep in mind that you might face early repayment charges when changing to a new product before your current deal ends. 

• Tracker Rate mortgages: Your payments will directly follow base rate movements. A decrease in the base rate will lower your monthly payments, but an increase will raise them. 

• Standard Variable Rate (SVR) mortgages: Your payments may change if your lender adjusts their SVR in response to base rate changes. Remember, lenders can alter their SVR at any time, independently of the base rate. If you are on an SVR, it is advisable to explore potentially cheaper fixed or tracker rate options. 

When considering your mortgage options, do not focus solely on interest rates. Factor in additional fees, lender criteria, and your desired borrowing term. For a comprehensive review of your options, speak with a mortgage consultant who can compare thousands of deals from various lenders. 

Plus, use our handy calculator to estimate your monthly payments based on different interest rates: