The Bank of England base rate sets the cost of money for every UK lender — and, sooner or later, the rate on every UK mortgage. What it changes, and when you feel it, depends on whether you are on a tracker, a discount, a standard variable rate or a fixed deal.
The current Bank of England base rate
The base rate currently stands at 3.75%, held at the Monetary Policy Committee’s meeting on 30 April 2026. The next rate decision is due on 18 June 2026.
Today’s rate is the product of the 2021–24 inflation cycle. The Bank raised the rate repeatedly from its pandemic-era low of 0.10% as inflation moved well above the 2% target, and has held it at a restrictive level while inflation works its way back down.
Understanding the base rate
In simple terms, the base rate is the cost at which the Bank of England will lend money to commercial banks. This is their interest rate.
The base rate also feeds into swap rates, the rates at which banks lend to one another. When the base rate rises or falls, that change in funding cost is passed on to customers through the pricing of lending products such as mortgages and personal loans.
For individuals the effect is two-fold. It changes how expensive it is to borrow — which matters most for long-term lending such as a mortgage — and it changes how much interest your savings earn. The two move together: when borrowing is cheap, savings earn less; when savings earn more, borrowing costs more.
Why does the Bank of England base rate change?
The rate is set by a vote of the Monetary Policy Committee (MPC), which meets eight times a year. The committee can move the rate at any meeting or leave it unchanged — as it did when it held the rate at 3.75% in April 2026.
The MPC’s decisions are based on the economic circumstances of the UK, with the main aim of keeping inflation at or around the 2% target.
But how does the base rate impact inflation? While it is a highly complex economic chain reaction, it can be simplified in the following way:
If the base rate is low, borrowing is cheap, which encourages spending — people buy houses, take out car loans and start businesses — and that extra demand pushes inflation up. If the base rate is high, borrowing is expensive, so people save rather than spend. Less spending cools prices, as businesses reduce them to attract customers — a chain reaction that runs through the whole economy.
How will a base rate change impact your mortgage?
The type of mortgage you have is the main determining factor. If you are on a variable-rate mortgage, a base rate change feeds through to your repayments quickly — sometimes from the next payment.
If you are on a fixed-rate mortgage, you will not feel the impact of a base rate change until your fixed period ends.
Impact on a tracker mortgage
A tracker mortgage, as the name suggests, ‘tracks’ the Bank of England base rate plus a margin set by your lender — base rate + 1%, for example. At the current base rate of 3.75%, that tracker would charge 4.75%, and the rate would move — up or down — with every base-rate change.
If the base rate increases, your mortgage rate rises in line with it; if the base rate is cut, your rate falls. In periods when the rate is moving, tracker payments can vary significantly from one change to the next.
Impact on an SVR mortgage
SVR, or standard variable rate, is the rate most mortgages revert to when a fixed term ends. Most people remortgage to another deal at that point to avoid the SVR, because the rates tend to be higher and lenders can move them at their own discretion — usually in response to base-rate changes.
Impact on a fixed-rate mortgage
A fixed-rate mortgage provides a temporary safe haven from base-rate fluctuations: your interest rate is guaranteed for a set period. The risk sits at the end of the term — let the deal lapse and you move to the SVR, often at a markedly higher rate. Start reviewing your options well before your fixed period ends.
Whether to fix, and for how long, depends on where rates go next — which nobody can promise. A fix buys certainty over your payments; a tracker or variable deal passes future cuts on to you, and future rises too. The right choice depends on your circumstances and your appetite for payment risk — exactly the conversation to have with an adviser before your current deal ends.
Talk to an adviser
If your fixed rate is ending, or a base-rate decision has you weighing up a remortgage, we will set out the realistic options against your actual numbers. Call 020 7126 8574 or request a call back — we aim to reply within one working day.
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