Bank of England Holds at 3.75% — What It Means for Your Mortgage

The rate decision

The Bank of England held its base rate at 3.75% at its March 2026 meeting — as expected. What surprised markets was the tone: the Bank signalled it is in no hurry to cut, with some traders now pricing in two rate increases before year end, taking the rate to 4.25%.

The primary driver is the Middle East conflict, which has pushed energy and commodity prices higher, keeping inflation stickier than forecast.

What this means if you're on a tracker or SVR

If your mortgage tracks the base rate or you're on your lender's Standard Variable Rate (SVR), your monthly payments are directly exposed to any rate moves. With SVRs currently averaging around 8%, many households are paying significantly more than they would on a fixed deal.

Now is a good time to check whether remortgaging to a fixed rate makes sense — especially with some lenders pricing two-year fixes at 5.54% and five-year fixes at 5.56% (April 2026).

If your fixed deal is ending in the next 6 months

Most lenders let you lock in a new rate up to 6 months before your current deal expires — without paying early repayment charges. Given the uncertainty in the market, locking in now protects you against any further rate rises between now and your renewal date.

• Use a whole-of-market broker (like L&C Mortgages or Habito) to find the best deal
• Avoid product fees over £1,000 unless the rate difference makes it worth it — calculate total cost over the deal period
• Check your credit file before applying — a clean file gets you access to better rates

If you just fixed recently

Sit tight. The early repayment charges on most fixed deals make switching within the deal period uneconomical unless your circumstances have changed significantly. Use this time to overpay if your deal allows it — most lenders allow 10% overpayment per year without charge.

First-time buyers

A holding rate is not bad news for buyers — it provides certainty. The bigger challenge is affordability, with lenders stress-testing at higher rates. Work with a broker to understand exactly how much you can borrow at current rates before spending time viewing properties you may not qualify for.

The bottom line

The era of cheap mortgages is not returning soon. The smartest move for most households right now is to fix, lock in rate certainty, and overpay where possible. If your deal ends within 6 months, act now — don't wait and hope rates fall.