Current Interest Rates & Mortgage Market
The latest Bank of England base rate, current mortgage rates, and what they mean for buyers and homeowners.
Bank of England base rate
The Bank of England base rate is currently 4.50% (as of March 2026). The Monetary Policy Committee (MPC) meets eight times a year to set the rate. After peaking at 5.25% in August 2023, rates have been gradually reduced as inflation has fallen closer to the 2% target. Markets are currently pricing in further cuts through 2026, but the pace depends on inflation data and economic conditions.
Current mortgage rates
As of early 2026, typical rates for a 75% LTV mortgage are around 4.0–4.5% for a 2-year fix and 3.8–4.3% for a 5-year fix. At 90% LTV, add roughly 0.5–1.0% to these rates. The best deals change daily — always check current rates with a broker or comparison site. Rates have come down significantly from their 2023 peaks but remain above the sub-2% levels seen in 2021.
What this means for buyers
At current rates, a £200,000 repayment mortgage over 25 years costs approximately £1,100–£1,200 per month. This is significantly more than the £850–£950 you would have paid at 2021 rates. However, if rates continue to fall as expected, you could remortgage to a better deal in 2–5 years. Consider whether a shorter fix (to remortgage sooner when rates drop) or a longer fix (for payment certainty) suits your situation.
Tracker vs fixed
With rates expected to fall, tracker mortgages may look attractive — your payments would decrease automatically as the base rate drops. However, you take the risk that rates could rise instead. A 2-year fix gives certainty in the near term and lets you reassess relatively quickly. A 5-year fix locks in current rates — good if you want stability and are concerned rates might not fall as far as markets expect.
Rate forecast
Market expectations (as reflected in swap rates) suggest the base rate could fall to around 3.5–4.0% by the end of 2026 and potentially lower in 2027. However, forecasts are uncertain and depend heavily on inflation trends, wage growth, and global economic conditions. Do not make purchasing decisions based solely on rate predictions.