Bank of England Holds Base Rate at 3.75%: The Hidden Shift in Mortgages
Today, the Bank of England confirmed that the Base Rate will remain at 3.75%. While “no change” might sound like a period of stability, the mortgage market is currently anything but static.
What does this mean for you?
If you are on a Tracker mortgage, your payments will stay exactly where they are for now. However, if you are looking for a Fixed Rate, the landscape is shifting.
The “Swap Rate” Factor. While the Base Rate is the headline, lenders price their fixed-rate deals based on Swap Rates (the rates banks charge each other for long-term funding). As you can see from our latest chart, these Swap Rates have been rising recently.
When Swap Rates go up, the cost of funding for banks increases. We are already seeing this filter through, with several major lenders nudging their fixed-rate deal prices upward, even though the Base Rate hasn’t moved.
The Bottom Line. Stability in the Base Rate doesn’t always mean stability in fixed rate mortgage offerings. Staying informed on the underlying market trends is key to understanding where your next deal might land.