On 17 September 2026, the Bank of England voted to maintain the Base Rate at 3.75%. This decision marks no change in the rate since December 2025, when it was lowered by 0.25%. The Bank’s intent in setting the Base Rate is to keep inflation near the 2% target while ensuring the overall health of the economy. As of the latest data, inflation stands at 3.1%, indicating that prices for goods and services have increased by 3.1% compared to the previous year.
Mortgage rates have also been affected by these economic conditions. The average rates for two-year and five-year fixed mortgages are approximately 5.39% as of 17 September 2026. This is an increase from the 4.25% average seen before geopolitical tensions in Iran, but a slight decrease from the 5.43% peak during heightened tensions in April. Despite the Base Rate hold, mortgage lenders are likely to continue factoring in potential future rate hikes, affecting the rates offered to borrowers.
Mortgage Market and Future Expectations
The decision to hold the Base Rate may provide short-term stability for some borrowers, particularly those with tracker mortgages, whose repayments are directly tied to this rate. However, Matt Smith, a mortgage expert at Rightmove, cautions that financial markets still anticipate possible rate increases in the coming months. As a result, borrowers should not assume that mortgage rates have stabilised or peaked.
For those planning to move, understanding affordability and keeping an eye on available mortgage products remain key. While the Base Rate hold offers temporary relief, the broader economic landscape continues to influence mortgage pricing. The Bank of England’s next interest rate decision is scheduled for 5 November 2026, and it will be essential to monitor how this might impact future borrowing costs.
What this means for newcomers
For newcomers renting in the UK, the Base Rate and mortgage landscape can indirectly affect rental prices and housing availability. Although the base rate hold may temporarily ease the pressure on mortgage borrowers, any changes in borrowing costs can have a knock-on effect on landlords and, consequently, tenants. Understanding these dynamics can help you make informed decisions about renting in the UK.
It’s important to familiarise yourself with the recent changes brought by the Renters Rights Act 2025, which came into force on 1 May 2026. This legislation has improved tenant protections, such as abolishing Section 21 no-fault evictions. For more full information on renting as a newcomer, you can consult our UK renting guide for newcomers.
What you should do
- Monitor Mortgage Rates: Keep an eye on mortgage rate trends and future rate decisions by the Bank of England. This will help you understand the market and plan your finances better, especially if you intend to transition from renting to homeownership.
- Understand Your Renting Agreement: Familiarise yourself with your rights under the Renters Rights Act 2025. This will help you know what protections you have as a tenant and how to handle any issues that may arise with your landlord.
- Plan Your Finances: Ensure you have a strong understanding of your financial situation, including rent, deposits, and other living costs. Setting up a UK bank account and planning for council tax and utility bills are essential steps for managing your expenses effectively.
Frequently asked questions
What is the current Base Rate set by the Bank of England?
The current Base Rate set by the Bank of England is 3.75%, unchanged since December 2025.
How has the Base Rate affected mortgage rates?
The Base Rate hold means average two-year and five-year fixed mortgage rates are currently around 5.39%. These rates reflect past geopolitical tensions and lender expectations of future rate changes.
What are my rights as a tenant under the Renters Rights Act 2025?
The Renters Rights Act 2025, effective from May 2026, abolished Section 21 no-fault evictions and provided greater security for tenants, such as assured periodic tenancies.
Can I be evicted without a reason in the UK?
Since 1 May 2026, landlords can no longer evict tenants without a valid legal reason, thanks to the abolition of Section 21 no-fault evictions in England.
Source: Rightmove: read the original
