In February 2026 the Bank of England held the base rate at 3.75% — its fourth consecutive cut since the August 2023 peak of 5.25%. Markets are pricing an 80% probability of a further cut to 3.5% at the next MPC decision on 19 March 2026, with forecasters broadly expecting the rate to reach 3.0% by summer 2026.
For UK homeowners, that trajectory is significant. But whether it helps you — and how much — depends entirely on which type of mortgage you currently hold.
What is the Bank of England base rate?
The base rate is the interest rate the Bank of England charges commercial banks for overnight borrowing. It sets the floor for the cost of money across the economy. When it falls, mortgage rates generally follow — though not always immediately, and not always by the same amount.
From the 5.25% peak of August 2023, the base rate has fallen 1.5 percentage points. A meaningful shift — but the key question is always where your specific mortgage sits relative to it.
How tracker mortgages are affected
Tracker mortgages follow the base rate automatically at a fixed margin. If you are on a lifetime tracker at base rate + 0.99%, your current rate is 4.74%. If the March cut happens, that drops to 4.49% without you needing to do anything.
On a £200,000 mortgage with 20 years remaining, a 0.25% cut saves approximately £25-30 per month. Stack four such cuts and you are looking at meaningful annual savings. Check your mortgage offer for a floor rate — some trackers cannot fall below a minimum, which caps how much you benefit.
How standard variable rates (SVRs) are affected
SVRs are set by individual lenders and do not automatically track the base rate — but most pass cuts on within a few weeks of an MPC decision. The average SVR across all lenders as of March 2026 sits at approximately 7.15-7.45%. Even the lowest SVR in the market (Newcastle Building Society at around 6.3%) is far above any fixed deal available.
If you are on an SVR, you are paying hundreds of pounds more per month than you need to. Find out what a remortgage could save you here.
How fixed-rate mortgages are affected
If you are currently on a fixed rate, base rate changes do not affect your monthly payment until your term ends. However, they do affect the deals available when your deal expires — and current fixed rates are the most competitive they have been since late 2022.
As of early March 2026, the best available rates are:
- Two-year fix at 60% LTV: 3.55% — Yorkshire Building Society
- Two-year fix at 75% LTV: 3.61% — Yorkshire Building Society
- Two-year fix at 85% LTV: from 3.92% — Santander (first time sub-4% at this tier)
- Five-year fix at 60% LTV: 3.75% — First Direct
- Five-year fix at 75% LTV: 3.84% — First Direct
These are significantly lower than even six months ago. The gap between two-year and five-year fixes has narrowed to almost nothing — which makes the term decision genuinely interesting right now.
Should you fix now or wait for rates to fall further?
At 3.55%, a two-year fix is already close to where many analysts expect the best rates to settle long-term. Waiting for a further 0.2% improvement on a fix while sitting on an SVR at 7%+ is rarely the right calculation. Starting the review process now — locking in six months early if your deal allows — is almost always the right move.
When does my fixed deal end?
Start reviewing your options three to six months before your current deal expires. Most lenders allow you to lock in a rate up to six months in advance. If rates fall further before your start date, you can usually switch to the better rate from the same lender without penalty.
What should I do next?
Vsure Financial searches the whole market and tells you exactly where the best deal is for your specific situation. The first conversation is free, and there is no obligation to proceed. Speak to an adviser here.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. This article is for information only and does not constitute regulated financial advice.
How the Base Rate Affects Your Mortgage Rate
When the Bank of England adjusts its base rate, lenders do not immediately pass this change to borrowers. Instead, they use the base rate as a guide for setting their own rates. If you’re on a variable rate mortgage, you may see changes fairly quickly — typically within 30 days. Fixed-rate mortgages, however, are not directly affected by base rate changes after completion, which is why many borrowers lock in a rate when they expect rates to rise.
The relationship between the base rate and mortgage rates isn’t one-to-one. A 0.25% change in the base rate might result in a 0.1% to 0.3% change in mortgage products, depending on lender competition and funding costs. This is important to understand when you’re comparing mortgage deals.
Tracker, Standard Variable, and Discount Mortgages
Tracker mortgages follow the base rate directly, often at a fixed spread (e.g., Base Rate + 2%). These typically offer the lowest rates but carry more risk if rates rise sharply.
Standard Variable Rate (SVR) mortgages are set by individual lenders and do not track the base rate directly. Lenders can change SVRs independently, which often means higher rates than trackers. Many borrowers find themselves on unfavourable SVRs if they haven’t switched deals.
Discount mortgages offer a discount off the lender’s SVR (e.g., SVR – 0.5%). This can be good value early on, but if the SVR rises, so does your rate.
When to Remortgage
If the base rate is expected to fall, and you’re coming to the end of a fixed-rate deal, you might lock in a lower fixed rate before the fall. Conversely, if rates are expected to rise, securing a fixed rate sooner rather than later protects you from further increases.
Remortgage costs include arrangement fees (£0–£2,000), valuation fees (£100–£300), and legal fees (£150–£400). You should only remortgage if the rate savings over the remaining term exceed these costs.
Key Takeaway
The base rate is the starting point for UK mortgage pricing, but it’s not the whole story. Your mortgage rate depends on the type of product, lender competition, your credit score, deposit size, and loan-to-value ratio. Regularly checking your rate against current market rates ensures you’re not paying more than necessary.
Contact Vsure to see if remortgaging to a better rate could save you thousands.
Important: This article is for information purposes only and does not constitute regulated financial advice. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. VSure Financial Ltd is an appointed representative of The Openwork Partnership, a trading style of Openwork Limited which is authorised and regulated by the Financial Conduct Authority. Approved by The Openwork Partnership on 01/02/2025. Speak to an adviser for advice tailored to your circumstances.
