The Bank of England has announced that it will hold the Base Rate at 3.75%, keeping interest rates unchanged as policymakers continue to weigh rising inflation against softer conditions elsewhere in the economy.¹
At its September meeting, the Monetary Policy Committee (MPC) voted by a majority of 6–3 to maintain Bank Rate at its current level. Three members preferred to increase rates by 0.25 percentage points to 4%.
The decision means Bank Rate has remained at 3.75% since December 2025, providing some immediate stability for borrowers. However, the outlook for mortgage rates remains less straightforward, with lenders also responding to inflation expectations, swap rates, bond markets and wider economic conditions.
The latest inflation figures have added to the Bank’s challenge. According to the Office for National Statistics, CPI inflation rose to 3.1% in the 12 months to August, up from 2.9% in July and remaining above the Bank of England’s 2% target.²
The Base Rate is the core interest rate set by the Bank of England and influences the rates banks and building societies offer on mortgages, loans and savings.
When the Base Rate rises, borrowing will often become more expensive. When it falls, borrowing costs can become cheaper, although mortgage rates do not always move immediately or by the same amount.
By keeping the Base Rate at 3.75%, the Bank has chosen not to add to borrowing costs directly at its September meeting.
For homeowners, buyers and landlords, that provides some certainty in the short term. However, a Base Rate hold does not mean mortgage pricing will necessarily remain unchanged.
Fixed mortgage rates in particular are affected by wider financial markets and expectations about where interest rates could move next.
The Bank is currently balancing two competing pressures.
Inflation has started to move higher again. According to the Office for National Statistics, CPI inflation increased from 2.9% in July to 3.1% in August, with transport costs, particularly motor fuels, making the largest upward contribution to the annual rate.
Energy prices and continuing uncertainty in the Middle East also remain important factors for the inflation outlook.
The Bank cannot directly control global energy prices. Instead, policymakers are focused on whether those higher costs begin to feed more widely into the prices charged by businesses and the wages paid to workers.
At the same time, there are signs that the wider economy is not overheating. ONS GDP data showed that UK GDP grew by 0.4% in July and by 0.4% across the three months to July, although conditions remain mixed across different parts of the economy.³
This creates a difficult balance for the MPC. Keeping rates higher can help limit persistent inflation, but higher borrowing costs can also place additional pressure on households and businesses.
The 6–3 vote illustrates that policymakers remain divided over the appropriate response. Three members believed a rise to 4% was warranted, while the majority preferred to leave policy unchanged.
For homeowners, there is no immediate change to the Bank of England Base Rate following September’s announcement.
If you are on a fixed-rate mortgage, your monthly repayments should continue at the agreed rate until your existing deal comes to an end.
Tracker mortgages are usually linked more directly to the Base Rate, so today’s hold means there should be no change to payments purely as a result of the MPC’s decision.
Borrowers on standard variable rates are more dependent on individual lender decisions.
However, homeowners approaching the end of a fixed-rate mortgage should still review their options early.
Even with Bank Rate unchanged, mortgage products can move as financial markets respond to inflation and expectations about future interest rates.
Speaking to a mortgage adviser before your current deal expires can help you understand the options available and plan ahead rather than waiting until the last minute.
For buyers, September’s decision avoids the immediate impact of another increase in the Base Rate.
That stability can make it easier to plan a property purchase, but affordability remains an important consideration.
Mortgage rates can change independently of the Base Rate, meaning buyers should focus on the products currently available rather than assuming that an unchanged Bank Rate will automatically result in cheaper mortgages.
Before beginning a property search or making an offer, it is worth understanding your budget, deposit and likely monthly repayments.
Securing an agreement in principle can also give you a clearer idea of what you may be able to borrow.
Edward Mellor’s in-house mortgage advisers can help buyers review the available options and understand what different mortgage rates could mean for their monthly costs.
For sellers, stability in the Base Rate removes one immediate source of uncertainty for buyers.
Many people moving home will be doing so with a mortgage, so confidence around borrowing costs can play an important role in their decision to enter the market.
However, sellers should not rely on the Base Rate decision alone to generate demand.
Pricing remains particularly important. Buyers are increasingly focused on value and monthly affordability, meaning homes that are realistically priced and well presented are more likely to attract serious interest.
With the autumn property market now underway, homeowners considering a move should start by understanding what their property could realistically achieve in current market conditions.
A free property valuation from a local Edward Mellor expert can help you assess current buyer demand, comparable sales and the most appropriate asking price for your home.
For landlords and buy-to-let investors, the decision keeps the headline Bank Rate unchanged but does not remove pressure on borrowing costs.
Landlords approaching the end of an existing mortgage deal should consider the potential cost of refinancing and how this affects the overall performance of their investment.
Rental income, mortgage payments, maintenance, management costs and longer-term capital growth should all form part of that assessment.
For investors considering a new purchase, affordability and rental yield remain important, but so too does the cost of finance.
Reviewing the numbers carefully before committing to a property can help ensure that an investment remains sustainable if mortgage rates change.
The next Bank of England Base Rate announcement is scheduled for Thursday 5 November 2026, according to the Bank’s Monetary Policy Committee calendar.⁴
Between now and then, inflation, energy prices, wage growth, employment and wider economic activity are likely to remain important indicators for the Monetary Policy Committee.
September’s decision therefore provides stability for now, rather than certainty about where rates will move next.
The key message from the September announcement is that the Bank of England is keeping the Base Rate at 3.75% while it continues to assess whether the recent rise in inflation will prove temporary or become more persistent.
For the property market, an unchanged Base Rate provides some short-term stability, but mortgage pricing and affordability will continue to influence buyer and seller decisions.
For homeowners, buyers, sellers and landlords, preparation remains important.
Whether you are reviewing your mortgage, planning to buy, considering selling your home or assessing a property investment, understanding your position early can help you make informed decisions as conditions change.
To discuss how the latest Base Rate decision could affect your property plans, get in touch with Edward Mellor today.
With over 40 years of experience helping people buy, sell and manage property, our local experts are here to support you throughout your property journey.
Sources
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Most Buy-to-Let Mortgages are not regulated by the Financial Conduct Authority.
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Edward Mellor Limited is an appointed representative of The Openwork Partnership, a trading style of Openwork Limited, which is authorised and regulated by the Financial Conduct Authority.
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