Last week, the Bank of England’s Monetary Policy Committee (MPC) met to decide the direction of UK interest rates, an event closely watched by homeowners, mortgage seekers, and financial markets alike. In a widely anticipated move, the MPC chose to hold the base interest rate unchanged at 4.0%. This decision comes at a critical time, as headline inflation remains stubbornly high at 3.8%, nearly double the Bank’s official target of 2.0%. While the MPC expressed an expectation that inflation will gradually fall back to its target, committee members signaled a cautious approach, making it clear that any further reduction in the base rate is unlikely in the short term.

The decision to maintain the base rate at 4.0% was heavily influenced by the ongoing challenge of inflation. Despite earlier optimism that price pressures might ease quickly, inflation has proven more stubborn than many had hoped. At 3.8%, it remains well above the level deemed sustainable for the UK economy. The MPC’s primary remit is to control inflation, and with figures almost double their target, the committee simply cannot risk premature rate cuts that could reignite price rises. In their statement, members acknowledged that while energy prices are stabilizing and supply chain pressures have lessened, wage growth and services inflation continue to exert upward pressure on prices.

Financial markets had previously priced in a series of rate cuts for 2025, leading some mortgage lenders to lower their best mortgage and remortgage deals in anticipation. However, the latest MPC vote to keep rates on hold, combined with the persistence of inflation, has shifted sentiment. Lenders are now reassessing their offers, and there is a growing likelihood that some of the most attractive fixed-rate mortgage deals will be withdrawn from the market. For homeowners and those seeking to remortgage, this means that the window to secure the lowest rates may be closing, at least for now.

If you are currently on a standard variable rate (SVR) mortgage, or your fixed-rate deal is nearing its end, it is especially important to act promptly. SVR mortgages typically track the lender’s own rate, which can rise at any time and is usually higher than the best fixed deals available. As lenders react to the Bank’s decision and the inflation outlook, they may raise SVR rates or withdraw competitive remortgage offers. Homeowners in this position should start by shopping online for remortgage deals. The online market provides a wide selection of lenders and products, making it easier to compare rates and terms than ever before.

The most efficient starting point for anyone considering a remortgage is to work with a reputable remortgage broker. Brokers have access to a broad range of deals, including some that are not advertised directly to the public. Shopping for a current remortgage could help explain how different rates will impact your monthly repayments. Gathering quotes from multiple lenders is crucial, as the difference between the best and worst deals can mean significant savings over the life of your mortgage and a broker could be a quick one-stop shopping experience.

For those on an SVR, approaching the end of a fixed term, or simply wanting to understand how the current interest rate environment will affect their repayments, obtaining several quotes is a smart move. Not only does this provide a clearer picture of what is available, but it also puts you in a stronger position to negotiate with your existing lender. In some cases, lenders might be willing to match or even beat deals from competitors to retain your business. Understanding the impact of current rates on your repayments can also inform your decision about whether to lock in a rate now or wait in hopes of future reductions.

Looking ahead, most forecasts suggest that the Bank of England’s base rate is unlikely to fall before the first quarter of next year. The MPC has indicated it will remain vigilant, prioritizing a sustained return of inflation to the 2.0% target before considering any rate cuts. This means that the current rates, and the deals available, are likely to remain in place for several months. For homeowners, this period of relative stability provides an opportunity to review your mortgage arrangements, gather quotes, and secure the best possible deal for your circumstances.

The Bank of England’s decision to keep the base rate at 4.0% reflects its ongoing battle with inflation. For UK homeowners and those seeking a mortgage or remortgage, the message is clear: don’t delay. With inflation still high and lenders reassessing their offers, now is the time to research your options, consult a broker website, and secure a deal that suits your needs. Acting now could help protect you from potential rate increases and ensure your financial peace of mind in the months ahead.