Bank of England base rate guide

The Bank of England's base rate is 5.25%. Find out what the base rate is and how it affects your mortgage.

Key points

  • The current base rate is 5.25% as of February 2024

  • The base rate holding steady for consecutive months suggests interest rates may have reached their peak.

What is the Bank of England base rate right now?

The Bank of England base rate is currently at a high of 5.25% as of February 2024.

The base rate remained at 5.25% since August 2023.

The Bank of England has been gradually increasing the base rate to curb inflation after the coronavirus pandemic, with 14 consecutive rate rises. However, it has held the base rate at 5.25% for last four reviews.

It was reduced to a low of 0.1% on 19 March 2020 to help control the economic shock of the pandemic.

The Bank of England base rate explained

The Bank of England base rate is an interest rate. It’s also referred to as ‘bank rate’, ‘interest rate’ or ‘base rate’.

The base rate is the interest rate that banks and lenders pay when they borrow from the Bank of England.

It is the most important interest rate in the UK. It influences most interest rates, including savings accounts, credit cards, loans and mortgages.

Usually, mortgage rates go up or down quite soon after the base rate changes.

The Monetary Policy Committee (MPC) decides the base rate. The committee meets to discuss it every 6 weeks.

The MPC last met on 3 August 2023 and decided to increase the base rate from 5% to 5.25%.

The MPC changes the base rate to meet government targets to keep inflation low and stable.

Rising inflation in 2022 explains why the base rate has also been gradually increasing.

The base rate was cut to a record low of 0.5% following the financial crisis of 2008/9. It stayed at the same level for years before the MPC cut it to a new low of 0.25% in August 2016 after the Brexit vote.

It was 0.75% from August 2018 to March 2020 when it was cut to 0.25% because of coronavirus.

The base rate was then cut again to 0.1% on 19 March 2020 and raised to 0.25% on 16 December 2021. After this point, the base rate was increased 8 times in 2022. 

On 21 May 2020, the Bank of England said that the base rate could drop lower than 0.1%, possibly to a negative interest rate.

The bank's governor, Andrew Bailey, said they're looking at other banks that have used negative interest rates to see how they could work in the UK.

A negative interest rate means that you do not pay any interest when you borrow money. Instead, the lender pays you interest.

If the Bank of England sets a negative base rate, it does not mean that there will be negative fixed-rate mortgages.

If you are on a tracker mortgage or discount rate mortgage, you could end up with smaller monthly repayments.

The next base rate meeting will be on 21 September 2023.

The Monetary Policy Committee (MPC) meets around every 6 weeks to discuss if the base rate should go up or down.

When will the base rate go down?

The base rate increased 14 consecutive times since the end of 2021 by the Bank of England in an attempt to balance out inflation. Since August 2023, it has remained steady - suggesting the anti-inflationary measures are working.

There are 9 members of the Monetary Policy Committee, which decides every 6 weeks if the bank rate should go up, down, or stay the same. Their voting record is public. So if you start to see more members voting for a rate increase, that could mean the base rate will increase soon.

One of the ways the Bank of England tries to control inflation is by increasing the cost of borrowing. If it increases the base rate, the interest rate on credit cards, loans and mortgages usually increases by a similar amount.

Interest rates had been at their lowest in the last few years but, following the pandemic, they have increased dramatically.

Bank of England base rate history

Here's how the Bank of England base rate has changed since 2000. The base rate has historically been much higher than it is today.

How the base rate affects mortgages

The Bank of England base rate impacts mortgage interest rates.

They're important for anyone who has a mortgage or wants to get one.

Usually, mortgage lenders change their mortgage rates quite soon after the base rate is changed.

If the bank rate goes up:

  • funding for lenders becomes more expensive

  • lenders pass that extra cost onto borrowers

  • borrowers usually pay more in interest on their mortgage every month

To avoid the possibility of higher interest rates you can choose a fixed rate mortgage.

If the bank rate goes down:

  • funding for lenders becomes cheaper

  • borrowers usually pay less in interest on their mortgage every month

When will mortgage rates come down?

2023 has been a tumultuous year for homeowners. We saw remortgage fixed rates surging post the disastrous mini-budget last year and then peaking around 6.16% during August due to base rate hikes. Fortunately, recent positive inflation data means the Bank of England has maintained the base rate at 5.25%, offering a small silver lining for homeowners. 

The combination of declining swap rates and a challenging housing market has incentivised lenders to slash their rates, bringing the average two-year fixed remortgage rate to approximately 5.24% in December 2023.

Precise predictions for 2024 are difficult without a crystal ball because they will depend on inflation trends. Should the current downward trend persist, variable-rate mortgage holders might want to explore fixed-rate options, but it’s important to take all future forecasts with a pinch of salt because multiple factors influence mortgage rates. 

The fact remains that homeowners approaching the end of their fixed deals are going to have to dig deep to cover the higher cost of their mortgage repayments, with the average two-year fixed rate twice what it was this time two years ago. If you don’t think you’re going to be able to afford your mortgage repayments, don’t bury your head in the sand. Speak to your lender as soon as possible. For further guidance, don't hesitate to give us a call.

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Important info & marketing claims

You may have to pay an early repayment charge to your existing lender if you remortgage. Your savings will depend on personal circumstances.

Your home may be repossessed if you do not keep up repayments on your mortgage.

*The savings figure of £656 is based on remortgage customers in April 2024. Read more on our marketing claims page.

We can't always guarantee we will be able to help you with your mortgage application depending on your credit history and circumstances.

Average mortgage decision and approval times are based on's historic data for lenders we submit applications to.

Tracker rates are identified after comparing over 12,000 mortgage products from over 100 mortgage lenders.

As of January 2023, has access to over 100 lenders. This number is subject to change.

For buy-to-let landlords, there's no guarantee that it will be possible to arrange continuous letting of a property, nor that rental income will be sufficient to meet the cost of the mortgage.