How the Bank of England Base Rate Affects Mortgage Applications

You should be aware of the Bank of England’s base rate if you’re applying for a mortgage or any other type of finance.

But what exactly is the base rate, what is it currently set at, and how could it affect your mortgage application? You’ll find the answers to these questions and more in this guide.

What is the Bank of England base rate, and how does it affect mortgages?

The Bank of England base rate is an interest rate set by the UK’s central bank. It determines the rate banks and lenders will pay when borrowing from the Bank of England.

It can significantly impact mortgages, as the interest rate borrowers pay on them usually moves up or down when the central bank changes its base rate. The same applies to other financial products, including savings accounts, loans, and ISAs.

Certain types of mortgages are affected more than others. Some tracker mortgages, for example, are tied directly to the base rate and will move up or down in line with it. They can be great at times of low interest but risky under volatile market conditions.

When the Bank of England raises its rate, lenders typically increase their standard variable rate (SVR) and potentially the rates across their product range, but this isn’t always bad news for existing borrowers. Many mortgage agreements, such as fixed-rate mortgages, have an introductory rate period that’s unaffected by base rate changes.

If you’re applying for a mortgage, it’s a good idea to look up a forecast for the base rate or speak to an expert to see whether it’s likely to move up or down during the process.

Can your interest rate change during the mortgage application process?

This depends on the lender you choose. Some lenders say the rate is secured once an agreement in principle has been given, some only upon lodging a full application or when the mortgage offer has been made, and some even reserve the right to change it up until completion.

In a nutshell, though, there’s nothing technically that could stop a lender from changing the terms of your agreement any time up until completion.

What is it currently set at?

At the time of writing (September 2025), the Bank of England’s base rate is 4%. Following previous rate rises, many mortgage lenders have already adjusted their rates to match the central bank’s, and while inflation remains high, further rate hikes are not out of the question.

In the run-up to the latest base rate announcements, many mortgage lenders decreased their rates slightly, as the latest forecasts suggest that the current base rate rise cycle may now be over.

What to do if you’re concerned about the base rate

If you’re worried about being hit by a sudden interest rate hike or missing out on the best mortgage deal because the Bank of England might change the status quo, speak to a broker.

The right mortgage broker can help you safeguard against an incoming rates spike by getting your application over the line before it comes in. By assisting you with the paperwork and ensuring you’re matched with the right lender the first time, your broker can shave time off the application process and get you approved ahead of an expected rise.

A mortgage advisor can also recommend products that protect you against future rate rises, including fixed-rate mortgages with lengthy introductory periods.

Even if the Bank of England’s base rate is at rock bottom, it’s still worth speaking to a mortgage broker. They can help you take advantage of the low rates by recommending products that are directly tied to them, such as tracker mortgage agreements.

Should you avoid remortgaging if the rate is high?

Not necessarily. Delaying your plans could mean you’re running the risk of ending up on your lender’s standard variable rate, which is nearly always higher than the introductory rates periods of fixed and discounted mortgage loans.

Moreover, a high base rate doesn’t necessarily mean you’ll get a bad deal on your remortgage. Even though the cost of borrowing has increased for lenders, not all of the most favourable remortgage products will be instantly pulled from the market.

If your creditworthiness is strong – i.e. you have plenty of equity, a clean credit report and steady income – and you use a broker, there’s no reason why you can’t still get a good deal.

Is the rate likely to change in the future?

With the base rate now at 4%, it is unclear if the bank will decrease it further when the MPC next reviews its position.

However, some experts and analysts predict that inflation will see a sharp downturn in the coming months as markets begin to improve.

The Monetary Policy Committee meets every six weeks to discuss whether it will rise, fall or remain the same. Their voting history is freely accessible on the Bank of England’s website, so you can track it to see whether there is an upward trend of members calling for a shift in either direction.

Anyone planning to make a new mortgage application or approaching the end of an introductory rates period is advised to act quickly to get the best deal available under the current market conditions.

Speak to a mortgage interest rates expert

If you’re concerned about how the Bank of England’s base right might impact your mortgage plans, remember that help is available. We work with mortgage brokers who know how to safeguard borrowers against rate hikes and help them capitalise when rates are low.

Through our broker-matching service, we can pair you with the mortgage advisor who is best placed to help you land the lowest interest rate available, whether that’s by helping you get approved quickly. In contrast, if the base rate is low, secure a fixed-rate deal that fits your requirements and protects you against future interest rate shifts.

Call us on 0330 818 7026 or make an enquiry online, and we’ll set up a free, no-obligation chat with your ideal mortgage broker today.