The Bank of England held the base rate at 3.75% today (30 April 2026), the third hold in a row after cuts paused at the start of the year. The vote was 8-1, with chief economist Huw Pill the only member calling for a rise to 4.00%. The previous two holds in February and March had been unanimous, so the split today, while small, suggests the case for cutting has weakened further inside the room.
The hold caps a turbulent few months. The base rate had been brought down to 3.75% in December 2025, completing a series of reductions that began in August 2024 from a peak of 5.25%. The cuts came in stages, to 5.00%, 4.75%, 4.50%, 4.25%, 4.00%, and finally 3.75%. None of them came quickly, and none felt inevitable at the time.
What’s changed in 2026 is that the gradual easing has stalled. The Iran war pushed global energy and commodity prices sharply higher in early 2026, introducing an inflationary pressure the Bank hadn’t fully factored in. CPI rose to 3.3% in March 2026, up from 3.0% in February, with motor fuel and household energy doing most of the work. The Bank now expects inflation to climb closer to 3.5% in the third quarter of the year before easing.
To put that in context, inflation peaked at 11.1% in October 2022 and fell steadily through 2023 and 2024, dipping under the 2% target by the autumn of 2024. It crept back above target through 2025 and sat around 3.8% for much of the second half of the year. By January 2026 it had eased back to 3.0%, which felt like progress until the energy shock arrived.
Interest Rate Predictions
The rate cycle that began in 2022 now feels like it’s in a complicated middle phase rather than a clean wind-down.
For most of late 2024 and into 2025, the assumption was that further cuts would follow through 2026. Markets had been pricing in two reductions for this year. The Iran war changed that. By March, with energy prices spiking and inflation expectations rising, futures were briefly pricing in three quarter-point rate rises before year-end, which would have taken the base rate back to around 4.75%. Andrew Bailey pushed back hard on that, calling it overdone, and the ceasefire in mid-April has since eased the pressure.
Most lenders now expect the base rate to either remain flat for the rest of 2026 or be revised upward only once. Neither a cut nor a rise is certain, but the sense of a straightforward path downward has gone. The next MPC decision is due on 18 June 2026, and few expect a cut at that meeting either.
For borrowers, this means the modest improvements in mortgage costs seen through late 2025 stalled in March. The picture has improved a little since mid-April, but the Bank is still in a wait-and-see position, and lenders are pricing carefully rather than aggressively.
The chart above shows how the base rate has moved over time, including the 2022-2024 climb, the cuts through 2024 and 2025, and the current hold at 3.75%.
Mortgage Rate Predictions 2026
Mortgage rates moved in the wrong direction through March, but the picture has started to settle through April.
Average two-year fixed rates climbed back above 5% in March, with five-year deals sitting at a similar level. Sub-4% deals, which were briefly available earlier in the year, largely disappeared. Major lenders including Nationwide, NatWest, Barclays, HSBC and Santander all repriced upward in the week of 20 March 2026, a sign this wasn’t isolated movement from one or two providers.
The driver was swap rates. Lenders use swap markets to price fixed deals, and those rates rose sharply in response to the change in the interest rate outlook. A market that had been pricing in cuts moved to pricing in a much more uncertain path, and that fed directly into the deals on offer to borrowers.
Since mid-April, the picture has calmed. With the ceasefire holding and the immediate energy shock easing, lenders including Nationwide, HSBC, Halifax, Santander and TSB have started cutting fixed rates again. The cuts are modest rather than dramatic, but the direction has shifted. The average two-year fix is sitting just under 5.6% and the average five-year fix is closer to 5.54%, with the best two-year deals at 60% LTV available from around 4.55%.
This doesn’t mean rates are back to where they were at the start of the year. They are still meaningfully higher than in January, and the gradual improvement that had been building through late 2025 has lost its momentum. But the trajectory is no longer purely upward, and that matters for anyone trying to plan around a deal ending in the coming months.
What this means if your fixed deal is ending
A worked example helps make this real.
If you took a 5-year fix at 1.8% in 2021 on a £200,000 mortgage over 30 years, you’ve been paying around £719 per month. If you remortgage today onto an average 5-year fix at 5.54%, that payment becomes around £1,141. That’s roughly £422 more per month, or about £5,000 more a year.
That’s not a forecast or a worst case, it’s the typical move for someone coming off a 2021 deal in 2026. The numbers vary depending on your loan size, term and LTV, but the shape of the change is the same for most people in this position. Knowing what you’re walking into months in advance gives you time to plan, and that’s the value of starting the conversation early.
Leading Economists Predictions
Forecasts have widened considerably this year. The IMF expects UK inflation to rise to around 4% in 2026. The Food and Drink Federation has warned food inflation alone could hit 9% by year-end if the energy shock works through more slowly than hoped. Former MPC member Michael Saunders, now at Oxford Economics, has suggested CPI could go as high as 4.5% later in the year.
That’s the upside risk. The downside view, held by economists who see the ceasefire holding and commodity prices easing, is that inflation peaks in Q3 and starts falling back, allowing the Bank to resume cutting. Even on that more optimistic path, most forecasters now think the next cut won’t come before the end of 2026 and may slip into 2027.
The ultra-low mortgage rates seen before 2022 are not coming back. But how elevated rates stay depends heavily on factors, particularly global energy markets, that no one can predict with confidence right now.
A mortgage broker’s view
The 8-1 vote today is more telling than the headline. Three months ago, holds were unanimous. Now you’ve got the Bank’s chief economist voting for a rise. That doesn’t mean rates are going up, but it does mean anyone hoping for a quick cut should park that idea.
What I’m seeing in practice is people who took 5-year fixes around 2020 and 2021 are getting a hard reset right now. Someone on a 1.8% deal coming off in the next few months is looking at payments going up by £400 or more a month on a typical £200,000 mortgage. The mistake I see most often is people leaving it too late and ending up on the lender’s standard variable rate, which is currently averaging just over 7%. That’s a much bigger jump than remortgaging onto a current fix.
If your deal is ending in the next six months, get something locked in. Most offers are valid for six months and you can usually switch if a better deal appears before completion. The cost of doing nothing is real and avoidable. – Steve Roberts
Fixed Rate Mortgages: Should You Fix Your Mortgage Rate Now?
For anyone within six months of their current deal ending, the answer is almost always yes, lock something in. Rates are higher than they were in January but lower than they were in March, and the outlook is unsettled enough that holding off in the hope of a better deal is a bet rather than a strategy.
If your deal still has a year or more to run, you have more time to watch the market. But it’s worth knowing what you’d be remortgaging onto today so you’re not caught out when the time comes.
Trackers and variable rates appeal to those who believe rates will fall again and are comfortable with month-to-month movement. That view is reasonable, but the path to lower rates now looks longer and less direct than it did six months ago. For most people, the certainty of a fix is worth more in this environment than the chance of a small upside on a tracker.
Many lenders allow you to secure a rate well before your existing deal finishes. Even if rates improve before you complete, having something in place removes the stress of watching the market move.
How is the Bank of England base rate set?
The Bank of England’s base rate is set by the Monetary Policy Committee, often shortened to the MPC. It’s a group made up of Bank officials and external members, and they meet eight times a year to decide whether rates should change.
Today’s 8-1 vote, with Huw Pill the dissenter calling for a rise, is a reminder that even a “hold” can mask quite different views inside the room. The committee looks at a wide range of information before making a call. Inflation figures matter, but they’re not the only thing. Employment levels, wage growth, how the wider economy is performing, and how households and businesses are coping all come into the picture. Global events, as the energy shock of early 2026 has demonstrated, can rapidly change the calculation.
The current Governor, Andrew Bailey, follows the same broad framework used by previous governors. There isn’t a single trigger that forces a rate change. Decisions are made by weighing up lots of different signals and trying to judge how today’s choices might affect the economy months down the line.
That’s why base rate decisions can sometimes feel cautious or slow. The Bank is usually reacting to where things are heading, not just where they are right now.
What to do with my mortgage in 2026?
Remortgaging is more pressing in 2026 than it was at the start of the year. Whether you’re on a tracker, approaching the end of a fixed deal, or already on a lender’s standard variable rate, the cost of doing nothing has gone up.
The four steps below are how most people get from “deal ending soon” to “rate locked in” without making it harder than it needs to be.
Step 1 – Determine your current mortgage situation
This is where most people start, and it’s where most misunderstandings begin.
What type of mortgage are you on? What rate are you paying? How long does the deal have left to run, and what happens when it ends? These sound obvious, but they’re worth checking properly. If anything isn’t clear, your latest statement or your lender will confirm it.
Step 2 – Calculate the impact of an interest rate increase on your mortgage payments
With rates higher than they were a year ago, stress-testing your payments is more relevant than it was at the start of 2026.
An interest rate rise calculator lets you adjust the figures and see how your monthly payment might move. You’re not predicting what will happen, you’re getting a feel for what level of payment would be manageable and where it would start to feel uncomfortable.
Step 3 – Seek advice from a mortgage expert
If higher payments would start to feel uncomfortable, this is where advice becomes more useful.
A good mortgage adviser looks beyond the headline rate. How steady your income feels, what your regular spending looks like, and what you’ve got planned over the next few years all come into it. Once that picture is clearer, conversations about fixing, staying on a tracker, or leaving things as they are tend to make more sense.
They can also filter out options that look appealing online but don’t stack up once the details are looked at properly.
Step 4 – Lock in a rate sooner rather than later
If fixing is the right move, timing it matters.
Many lenders allow you to secure a rate up to six months before your current deal ends. With rates higher than they were at the start of 2026 and the outlook still unsettled, having something locked in removes a risk you don’t need to carry. If a better deal appears before you complete, you can usually switch to it. The point is to have a fallback in place, not to chase the perfect rate.
Why use a fee-free, whole-of-market broker
Comparison sites only show part of the picture. An independent, whole-of-market mortgage adviser can see deals that don’t appear online and can match you to lenders most likely to approve your application, which protects your credit file from unnecessary checks.
YesCanDo Money is fee-free and family-run. We don’t charge you for advice, and we have access to deals from across the market rather than a limited panel. With mortgage rates still finding their level through 2026, having someone in your corner who isn’t being paid by you to find you the right deal often makes the whole process feel calmer.
Further reading
- What happens when my fixed rate mortgage ends?
- The Different Types of Mortgages Explained
- 2023 sees a surge in 35-Year and 40 Year Mortgage Terms
- House Prices Falling Boosts Mortgage Product Transfers
FAQs
How does the Bank of England base rate affect mortgage rates?
Are mortgage rates likely to fall again in 2026?
Possibly, but slower than 2025.
Most forecasts point to a gradual easing rather than anything dramatic. Inflation still matters here. If it keeps cooling, lenders have more room to lower rates. If it doesn’t, things could stall for a while. That’s been the pattern recently.
Is a fixed or tracker mortgage better in 2026?
There isn’t a better option across the board.
Trackers can benefit if rates keep edging down, but your payment can move month to month. Fixed rates give certainty, which still appeals to a lot of people, especially if budgets are tight. It usually comes down to how much flexibility you’re comfortable with.
Should I fix my mortgage now or wait?
This is one of the most common questions I hear, and the honest answer is that it depends on timing.
If your deal is ending soon, fixing can remove a lot of stress. If you’ve got time and can handle some movement, waiting might work out better. The risk is that rates don’t always move in neat steps. That’s where personal advice helps.
When should I start looking at my mortgage options?
Most people leave it too late.
Realistically, around six to four months before your current deal ends is sensible. It gives you time to look around without pressure. Even if you don’t move straight away, you at least know where you stand.
