How the Bank of England Base Rate Affects Mortgage Applications

Everything you need to know about the Bank of England Base Rate and how a broker can help secure the best possible rate

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Author: Pete Mugleston

Mortgage Advisor, MD

Updated: June 4, 2024

The Bank of England’s base rate is something you should be aware of if you’re applying for a mortgage, or any other type of finance, for that matter.

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 that banks and lenders will pay when they borrow from the Bank of England.

It can have a significant impact on 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 mortgage 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.

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

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 really 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 (June 2024), the Bank of England’s base rate is 5.25%. It remained unchanged for the second consecutive time in a row, following the most recent Monetary Policy Committee (MPC) meeting. An increase of 0.25% was a possibility due to the Bank’s continued battle to bring inflation under control, so this was more positive news although there’s still a long way to go.

Following previous rate rises, many mortgage lenders have already adjusted their rates in line with 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 at an end.

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 yourself against an incoming rates spike by getting your application over the line before it comes in. By assisting you with the paperwork and making sure 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 mortgage products that will 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 as 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.

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Is the rate likely to change in the future?

With the base rate now at 5.25%, it is unclear if the bank will increase it further when the MPC next reviews its position.

However, some experts and analysts are predicting that inflation is about to 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 keep track of it to see whether there is an upward trend of members calling for a shift in either direction.

Anyone who’s planning to make a new mortgage application, or coming to 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, keep in mind that help is available. We work with mortgage brokers who know exactly how to safeguard borrowers against rate hikes and help them capitalise when rates are low.

Through our free 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 while the base rate is low or secure a fixed-rate deal that fits your requirements and protects you against any future interest rates shifts.

Call us on 0808 189 2301 or make an enquiry online and we’ll set up a free, no-obligation chat between you and your ideal mortgage broker today.


Technically, yes, but this is unlikely for the foreseeable future.

That said, the bank did consider dropping the rate below 0.1% during the peak of the coronavirus crisis. This would have meant that lenders would have to make interest payments to borrowers, rather than the other way around.

Such a move would not, however, have seen the introduction of negative fixed-rate mortgages but those on tracker and discount deals would have enjoyed a rate reduction.

The next one is scheduled for 14th December 2023. You can find out when the next ones will take place by checking the Bank of England’s website.

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About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for Online Mortgage Advisor of course!

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Pete Mugleston

Mortgage Advisor, MD

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