Rates are being held at 3.75% with the Bank still wanting to see a bit more progress on inflation before moving again. Price pressures have ticked back up, wage growth remains relatively strong, and the global backdrop is still unpredictable, so policymakers are reluctant to rush into further cuts and risk having to change direction later.
For the rest of the year, the most likely scenario is steady rather than dramatic. Rates are expected to stay around current levels for a while, with any cuts coming gradually and only once the data gives the Bank more confidence. That points to a period of welcome stability, giving mortgage and property professionals a clearer environment to plan and advise in.
Industry professionals provide their insights:
In response to the Bank of England’s decision to hold interest rates, Ryan McGrath, Director of Second Charge Mortgages at Pepper Money, comments:
Holding the base rate at 3.75% acts as a speed bump for borrowers who might have been banking on consecutive cuts after December. With inflation ticking up slightly, the Bank is clearly signalling that the route back to lower rates will be gradual, not a straight line.
For homeowners, this pause means the pressure lingers a bit longer. Anyone coming to the end of a fixed-term deal is still looking at a sharp jump in payments compared to the rates they secured five years ago. In that context, a full remortgage remains an unappealing, and often expensive, move for many.
This is where second charge mortgages continue to prove their worth. Instead of disturbing a low-interest first charge mortgage just to raise capital or consolidate debt, homeowners can use a second charge to access equity. It’s a practical way to manage finances efficiently without exposing the entire mortgage balance to today’s higher rates.”
Ben Thompson, Director of Home Moving Strategy, Mortgage Advice Bureau:
“The Bank of England has opted for the safety of the sidelines with today’s rate hold. Despite inflation moving in the right direction, the MPC clearly isn’t ready to hit the accelerator on further rate cuts yet. That said, we still hope for a couple more cuts this year before we get close to some sort of new equilibrium.
Since lenders will have already priced in this latest hold, the deals you see on the shelves today are likely as good as they’re going to get for a little while. Arguably, the smart move right now isn’t trying to wait out the market for a perfect moment that might not come: it’s about finding a deal that actually fits your life and your budget.
This is where an expert adviser really comes into their own. They do all the heavy lifting for you, looking past the headline rates to find a deal that matches your specific needs.”
Ben Allkins, head of mortgages and protection at Just Mortgages, said:
“The decision to hold the base rate was widely expected and consistent with the bank’s long-held approach. However, the optics around this decision have shifted. We’ve all seen mortgage rates edge back up as swap rates react to the growing expectations of fewer cuts. It’s a reminder to brokers and the wider market not count its chickens, particularly given the challenges at home and abroad.
For brokers, it’s a moment to be proactive. In particular, we need to be engaging with those clients who may have been holding off in the hopes of further competition and movement on rates. The focus has the shift away from a rate conversation and one that prioritises top quality, holistic advice – helping borrowers navigate the market and explore the wide variety of options still available to those from all backgrounds and circumstances.”
Richard Merrett, Managing Director of mortgage adviser, Alexander Hall, commented:
“Today’s decision to hold the base rate is unlikely to dampen the market momentum that has been building in recent months, and we’ve already seen a noticeable increase in activity following the cut in December, with buyers hitting the ground running in the new year with a renewed sense of confidence.
This confidence has been mirrored by lenders, who continue to offer greater product choice and more flexible terms, particularly when it comes to loan-to-income multiples. As a result, the average homebuyer is now around £1,000 better off each year when it comes to the cost of their mortgage repayments when compared to just 12 months ago.”
Jonathan Samuels, CEO of specialist lender, Octane Capital, commented:
“No news is good news in the grand scheme of things, and today’s decision to hold the base rate provides welcome consistency for both lenders and borrowers, particularly given the fact that inflation climbed in December and remains higher than the Bank of England’s two per cent target.
With this considered, a static base rate should provide lenders with the confidence to maintain competitive product ranges and pricing, whilst it also allows borrowers to plan with greater certainty. This will create a supportive environment for buyers and investors alike, helping to sustain activity and confidence across the property market..”
Damien Jefferies, Founder of Jefferies London, commented:
“Today’s decision to hold the base rate bolsters stability for international and high-net-worth buyers who are actively assessing opportunities in the UK market, with consistency in monetary policy helping to reinforce confidence and predictability when allocating capital across global property markets.
With borrowing costs remaining broadly stable, the UK continues to present an attractive proposition, and this should support continued cross-border investment and enable buyers to plan acquisitions with greater certainty over the months ahead.”
Marc von Grundherr, Director of Benham and Reeves, commented:
“The housing market has continued to demonstrate strong levels of activity so far this year, with the December rate cut helping to put homebuyers firmly on the front foot heading into 2026.
As a result, enquiry levels, viewings, and transaction volumes have remained robust, underpinned by improving confidence and more stable economic conditions, with today’s decision to hold the base rate unlikely to rock the boat.”
Verona Frankish, CEO of Yopa, commented:
“While today’s decision to hold interest rates may have disappointed those homebuyers hoping for further reductions to mortgage rates, it is unlikely to dampen market activity, with many buyers remaining keen to progress their plans this year having gained confidence from stabilising interest rates over the course of the last year.”
Tony Gambrill, Regional Sales Director at Chestertons, says:
“Buyer activity has strengthened since the beginning of the year, with house hunters continuing their search despite some lenders recently raising mortgage rates. While some buyers would have welcomed a cut in interest rates today, the majority will remain undeterred and proceed with their property search regardless.”
Joe Pepper, UK Chief Executive Officer, PEXA, said:
“Today’s decision prolongs the wait for thousands of UK borrowers looking to remortgage or buy a property, especially with the recent rate hikes being seen across the industry. It also highlights a looming crisis – the more people wait for better circumstances to buy, the more the backlog grows. Eventually, when the right triggers are pulled, the floodgates will open and demand for transactions will soar. Inevitably, the system will be entirely overwhelmed because the infrastructure supporting conveyancers is not set up to handle this many transactions at once – it is struggling as it is.
But this can be prevented. The key priority must be to support those who keep the housing system functioning. That means ensuring conveyancers are not buried under administrative backlogs without the capacity or resources to manage such heightened demand. The Future Property Transaction Group found that transaction times could be halved with the right digitalisation, freeing up conveyancers to focus on tasks that need their expertise. Getting this right is essential not just to keep the housing market afloat, but to ensure it can operate efficiently and sustainably for all – more investment in the right technology cannot come soon enough.”
Tony Hall, Head of Business Development at Saffron for Intermediaries, comments on the BoE interest rate decision:
“The decision to hold the base rate is hardly a surprise given that inflation has proven more stubborn than expected, climbing further from the Government’s 2% target. With the wider economy showing pockets of resilience, policymakers have opted for caution, and that’s filtering through to the mortgage market where rate reductions have slowed compared to recent weeks.
Despite this pause, some analysts suggest mortgage affordability is reaching its most manageable level in five years, thanks to easing rates and rising incomes, boosting buyer confidence. If inflation begins to ease back towards the Government’s target, attention will quickly turn to the next rate decision and the prospect of cuts later in the year. In a fast-changing market, speaking to a mortgage adviser is the best way for homebuyers to understand what these shifts mean for their own plans.”
Nick Hale, CEO at Movera, commented:
“This hold on the base rate aligns with the caution expected from the Bank of England, following the latest cut to 3.75% in December. It is clear the MPC is still concerned with measures to reduce inflation in the long term after it rose slightly to 3.4% at the end of last year, especially when wages are set to keep growing.
Nevertheless, Rightmove recently announced that February is the best month to list a house and successfully find a buyer, and this won’t have gone unnoticed by consumers, many of whom will be keen to take advantage of mortgage rates announced the wake of the last MPC rate cut. At Movera, we are committed to helping brokers and conveyancers keep up with the pace of these transactions and make property sales more efficient for all parties involved.”
Adrian MacDiarmid, head of mortgages at Barratt Redrow, said:
“While interest rates were left unchanged by the Bank of England today, we’ve now seen six rate cuts since August 2024. With mortgage rates falling and lenders easing affordability assessments, alongside the wide range of deposit boosts and incentives on offer, buying a new home is more achievable than many realise.”
Aaron Shinwell, Chief Lending Officer at Nottingham Building Society, said:
“With the bank of England confirming a hold at 3.75%, mortgage rates remain at their lowest levels since 2022, creating real opportunities for anyone looking to buy or remortgage. Rates have already passed their peak and could gradually edge down over time, which good news for the 1.8 million borrowers expected to remortgage this year and first-time buyers finding a more realistic route onto the property ladder.”
Matt Smith, Rightmove’s mortgages expert says: “Today’s Bank Rate hold was widely expected given underlying inflation and wage growth data, and it’s currently likely we’ll see the next Bank Rate cut in June. Average mortgage rates have remained pretty steady over the last couple of weeks despite the underlying cost of funding mortgages becoming more expensive to lenders. This is why some lenders have increased rates slightly over the last few days, but we’re seeing lenders try to remain as competitive as they can at a busy home-moving time of year. We’re still seeing some of the cheapest rates around since before the mini-Budget. We’re seeing an encouraging start to the year for home-moving activity, with many home-buyers taking advantage of lower mortgage rates and stable house prices to make their move.”
Emma Hollingworth, Chief Distribution Officer at LSL Financial Services, has commented on the Bank of England’s decision this afternoon to hold its base rate at 3.75%:
“With inflation unexpectedly rising in December, the Bank of England was always likely to err on the side of caution and keep interest rates on hold at this meeting.
While overall inflation is likely to fall back towards the Bank’s 2% target this year, stubbornly high services inflation will worry policymakers at the central bank. Until there is clear evidence that it is easing, the Bank’s rate-setters are likely to keep its powder dry.
Before the latest inflation data, markets had been pricing in two further 25-basis-point cuts this year. That path looks less certain now, although if December’s inflation jump proves to be a one-off and price growth starts to soften again, we could see one or two more cuts this year.
For borrowers, this means mortgage rates are unlikely to move much lower – if at all – in the near term. In fact, recent increases in Swap rates have caused some lenders to put up their mortgage rates.
That said, competition remains strong, and pricing remains relatively attractive, which is good news for the estimated 1.8 million borrowers rolling off fixed-rate mortgages in 2026. And it presents brokers with the perfect opportunity to re-engage with these borrowers and help them find the perfect deal for their circumstances.”
