Bank of England Base Rate Announcement: 18th September

The Bank of England met today to discuss interest rates - announcing it will stay as it is for another few weeks. It’s currently at 4%. And with inflation at 3.8% and a previous interest rate decrease on 7^th August, many were expecting a hold today. So, what does it mean for you and your mortgage? Here’s 5 quick answers to your 5 burning questions. 

What happened with interest rates today?   

The Bank of England voted today that interest rates will stay at 4%. The rate has been slowly working its way down since August 2024, and many economists were predicting it would hold today. 

Why did the rate stay the same?   

Every 6 weeks, the Bank of England reviews the base rate at their MPC (Monetary Policy Committee) meeting. It moves up and down (or stays the same) to help control inflation in the UK.   

Rates tend to rise as inflation goes up. A lower rate encourages people to spend their cash to help the economy grow. So, a hold in rates suggests inflation is under control, but not quite enough to cut interest rates. Current inflation is at 3.8% — and the target (set by the government) is 2%. 

What does it mean for the property market?   

We can’t know exactly what’ll happen. But the reasoning usually goes that higher interest rates are passed onto borrowers, who pay higher mortgage rates. This can mean fewer people are looking to buy houses, and the price of homes could drop.  

More market activity could lead to house price growth. The rate holding today is encouraging, as mortgages will likely continue to become slightly more affordable. As always, it’s best to talk to a professional, like a mortgage advisor, before making any big decisions. 

What does no change mean for my mortgage?   

A drop in interest rates generally translates into more affordable mortgages. Since rates were cut in August, mortgages seem to be slowly following. The average 2-year rate (at time of writing, September 2025) is 4.53%. That’s much cheaper than this time two years ago. At its peak, the average 2-year rate was 6.85%. Phew.  

• If you’re coming off a relatively cheap 5-year deal, you may have to shop around for affordable rates, as they started rising in 2021.  

• If you have a fixed-rate mortgage, you won't feel any effects until your term ends. Then you’ll move to your lender’s standard variable rate (SVR) - and you can look for a new rate to lock in.  

• For those waiting for further base rate cuts before remortgaging, it’s worth noting that mortgage rates don’t always lower exactly in line with the base rate.  

• At this point, it’s good to talk to a lender or a broker, as your standard variable rate may be a lot more than what you're on now. 

• If you’re on a tracker mortgage or a standard variable rate (SVR), you probably won’t see any change, as the monthly cost tends to move in line with the base rate. They usually have a minimum rate though, often set at the amount you were paying at the start of the deal.   

What happens next time?  

There are a few predictions out there. People generally expected the rate to hold today, with some expecting a further cut towards the end of the year. It’s hard to make an exact prediction, so until we find that crystal ball, we’ll have to wait and see. Want the latest property updates or have questions about the property market? Feel free to reach out – we’re here if you need us.