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BoE Holds Base Rate at 4.00% | What it Means for Your Mortgage [November 2025]
The Bank of England has voted to hold the base rate at 4.00% in November, but could further cuts be on the horizon?
In February, the Bank of England voted to reduce the base rate to 4.5%, a reduction of 0.25%. In March, it's voted to keep it the same, and in May the rate dropped again to 4.25%. Now, the rate has been held once again at 4.0% following August's reduction, continuing the Bank of England's trend for the year so far.
Mortgage borrowers on fixed-rate deals hae seen gradual drops since the beginning of the year, with those on trackers seeing some stability since the summer.
In addition, 1.8 million fixed-rate mortgages are due to end in 2025, and while rates are certainly higher than they were 3-5 years ago, the stable base rate will come as good news to many who are looking to remortgage onto a better rate.
At Clifton Private Finance, we've already seen multiple lenders reduce rates across a range of products in the lead up to and response to the base rate reduction, with many options now below 4%.
Here's a current snapshot (updated live):
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Key Takeaways
- The Bank of England voted to keep the base rate stable, holding at 4.00%, ahead of the Autumn Budget.
- Homeowners on tracker mortgages will see costs remaining steady, and fixed-rate borrowers are likely to benefit as mortgage rates continue to gradually drop.
- Lower mortgage rates could ease affordability concerns, helping first-time buyers enter the housing market.
- A key date will the Autumn Budget later in November, where tax changes may and ease inflation – which in theory could support lower base rates in the future.
Why Did the Rate Drop?
Over the past two years, the Bank of England has taken a hawkish stance towards the base rate. But with inflation only slightly higher than the Bank of England's 2% target and a need to stimulate more economic growth, industry experts widely expected another cut.
The base rate is the main way that the Bank of England controls inflation, so if inflation rises significantly, it's likely the bank rate would be increased again - keep an eye on inflation figures if you want a better idea of where rates may be heading next.
In 2024, mortgage rates fluctuated in response to bouts of economic uncertainty sparked by the Autumn Budget, overseas elections and other geopolitical influences.
It’s unlikely that interest rates will return to the super-low levels we saw before 2022, but five-year fixes dropping consistently across the board is certainly a sign that there are more reductions to come.
In this article, our mortgage brokers weigh in on the discussion, and we analyse the bigger picture of the UK economy, inflation, and the mortgage market in this article.
See similar: Are Mortgage Rates Going Down?
What Do Our Experts Say?
George Abouzolof
Senior Finance Broker CeMAP
Whilst the BoE has kept base rates unchanged, the US Federal Reserve recently cut its rate by 0.25%, bringing it in line with the BoE. The Fed expects two more reductions this year, and if UK inflation follows a similar trend, we may do the same. A key driver could be the Autumn Budget, where tax changes might squeeze incomes, reduce spending, and ease inflation – which in theory could support lower base rates in the future.
For borrowers on tracker products, this means no immediate change to monthly payments, but sentiment in the market remains cautiously optimistic. Fixed-rate mortgages continue to edge down as swap rates and gilt yields soften, with most borrowers still opting for shorter-term fixes in the hope of future cuts.
Property investors are showing resilience, with steady activity among first-time buyers and landlords. While some are waiting for clearer signs of further rate movement, many are seizing opportunities to purchase ahead of the potential impact of Autumn Budget changes.
So far, foreign investment remains stable, reflecting wider confidence in the UK property market despite global uncertainty.
Read blogs: Should You Get a Tracker or Fixed Rate Mortgage in 2024?
The graph below shows how the bank rate has increased since mid-2021.
(Credit: Bank of England)
How Does Inflation Influence the Bank Rate?
The country is recovering from high inflation rates that led to an elevated cost of living in 2022. The Bank of England controls inflation primarily by adjusting the bank rate, which determines the cost of borrowing across the nation. Higher interest rates mean that borrowing is more expensive, which limits economic activity.
Reduced economic activity will typically cause inflation to fall. However, it's also important that inflation doesn't fall too low. If this does happen, people may put off spending en masse in hopes that prices will drop. When spending stops completely, whole systems and companies can come to a grinding halt.
The aim is to keep inflation low and stable.
How Did Inflation Get So High?
COVID-19 caused a shortage in products and services in 2020, and this demand led to increased prices. Then, Russia’s invasion of Ukraine impacted energy and food prices. Finally, it became evident in 2022 that thousands of people had left the workforce following the pandemic. This pushed up hiring costs, and many businesses subsequently raised their prices.
These three major hits to the economy contributed to the current cost-of-living crisis. Because major events have a relationship with inflation, the long-term view on inflation is never set in stone, but experts can make an educated guess with the data they do have.
Inflation is now close to the BoE's target of 2%, which many feel is the primary reason the bank has lowered interest rates.
Now that the base rate has been dropped again, many experts are confident that we'll see a slight uptick in inflation, but there may well be room for further base rate reductions in the future.
How to Find an Affordable Mortgage in 2025
Despite the optimism about declining mortgage rates, deciding on the best option can be daunting and confusing.
We can help you compare mortgage products and their costs to find the best deal for your specific situation from a wide range of lenders nationwide.
Expert mortgage advisors have a finger on the pulse of the latest mortgage market news. Whether you're a first-time buyer, looking to refinance, or investing in a buy-to-let, we can help you understand your mortgage options so you feel confident you're making the right choice.
To see what we can do for you, call us at 0203 900 4322 or book an appointment below.
