>> read on to find out how the base rate affects your mortgage
The impact of the Base Rate on your mortgage depends on whether you are a new borrower or an existing homeowner, as well as the type of mortgage you have or are considering.
The current base rate is 3.75% (correct at 19/03/26)
for new mortgage applicants:
If you are in the market for a new mortgage, the current base rate will play a role in determining the interest rates available to you. Generally:- A higher base rate often leads to higher mortgage interest rates.
- A lower base rate can result in more competitive, lower-cost mortgage products.
for existing homeowners:
The effect on your mortgage payments will vary based on the type of mortgage you have...Fixed Rate mortgages:
If you have a fixed rate mortgage, your monthly payments will not change during the fixed term, regardless of base rate fluctuations. This provides stability and protection against rate increases but also means you cannot benefit from rate decreases.
Tracker Rate mortgages:
Tracker mortgages are directly linked to the base rate. Your interest rate will move in line with any base rate changes, affecting your monthly payments accordingly.
Standard Variable Rate (SVR) mortgages:
With an SVR mortgage, your payments may change if your lender adjusts their rate in response to base rate changes. However, lenders are not obligated to pass on these changes, and they can alter their SVR at any time, independent of the base rate.
While the base rate is important, it is not the only factor to consider when choosing a mortgage. Other elements that can impact the overall cost of your mortgage include:
- Additional fees and charges
- The length of your mortgage term
- Lender-specific criteria
To ensure you are getting the most suitable mortgage for your circumstances, it is advisable to consult with a mortgage professional who can provide personalised advice and compare a wide range of products.
the base rate and property values
The relationship between the base rate and property prices is complex and influenced by various factors. While changes in the base rate can affect the property market, it is not a direct correlation. Supply and demand dynamics play a significant role in determining property values.
To get an accurate picture of how your property's value may have changed, it is recommended to obtain a professional valuation.
stay informed and seek expert advice
Understanding the Bank of England base rate and its potential impact on your mortgage is an important part of managing your finances effectively. However, the mortgage market can be complex, and individual circumstances vary greatly.
For personalised advice and to explore the best mortgage options available to you, consider speaking with a qualified mortgage consultant who can guide you through the process and help you make informed decisions about your home financing.
Correct at the time of publishing – 19/03/26
Base rate correct at 19/03/26
Sources:
www.bankofengland.co.uk/boeapps/database/Bank-Rate.asp
Any fees payable will be explained in your initial no-obligation appointment, before you choose whether to use our Mortgage Services.
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