What the Bank of England’s 4% Bank Rate Means for UK Mortgage Borrowers

The Bank of England

September 2025, the Bank of England’s Monetary Policy Committee voted to hold the Bank Rate steady at 4%. For homeowners and buyers, this decision provides a sense of stability after several years of uncertainty. While some members argued for a small rate cut, the majority felt that holding the rate was the best option to balance inflation risks with economic growth. For borrowers, this stability reduces immediate pressure on tracker and variable mortgages, which directly follow the Bank Rate. It also provides some breathing space for households managing higher costs of living.

The announcement has had a knock-on effect in the mortgage market, where lenders have begun to compete more actively. Over the last few weeks, we’ve seen the reintroduction of more attractive two and five year fixed deals, some of which now fall below four percent for those with good credit histories and larger deposits. However, while headline rates look appealing, it remains important for borrowers to consider the overall cost of borrowing. Product fees, arrangement charges, and early repayment penalties can significantly affect the true value of a deal.

For those coming to the end of a fixed-term deal, remortgaging opportunities are becoming more plentiful. Staying on a lender’s standard variable rate could mean paying hundreds more each month than necessary, so exploring current fixed deals is worthwhile. On the other hand, borrowers who value flexibility may still prefer a tracker, particularly if they believe the Bank Rate may be reduced in the coming months.

Ultimately, the Bank of England’s pause offers a window of opportunity. Borrowers should weigh their financial priorities, compare deals carefully, and seek tailored advice to make sure they benefit from today’s market conditions rather than leaving savings on the table.