Bank of England against bright blue cloudy sky

Categories: government and politics | buy to let mortgages

The Bank of England has today held the Base Rate at 3.75%, maintaining its current position as policymakers continue to balance inflation concerns against wider economic growth.

While the decision was widely expected, landlords and property investors will still be watching closely for any indication of where borrowing costs could head during the second half of 2026.

Why was the Base Rate held?

The Bank of England uses the Base Rate to help control inflation, which remains above its long-term target of 2%.

There were a lot of competing influences coming up to the June Base Rate announcement, with an increase a possible outcome. Rising energy costs, versus a slow moving economy, disinflationary pressures (Consumer Price Index held at a cooling 2.8%, when in April 3% was expected, wage growth decelerated, employment opportunities slowed and a the European Central Bank raising rates where the US Federal Reserve held, amongst them.

The peace deal in Iran announced on 14th June, ahead of the Base Rate decision, could not have come at a better time. It was a key influence, alongside inflation data and the UK economy, which helped ease Swap rates and a Base Rate hold was anticipated.  

At its previous meeting, the MPC voted 8 - 1 in favour of holding rates, with one member voting for an increase. In today's meeting the vote was 7 votes supporting a hold and 2 voting for a rise.

Why does this matter to you?

The Base Rate influences borrowing costs across the wider economy, including mortgages.

However, mortgage pricing is more directly driven by Swap rates, lender funding costs and market expectations. This means fixed mortgage rates do not move directly in line with the Bank of England's decisions as tracker rates do, and lenders react ahead of Base Rate decisions rather than after them. 

Many landlords entered 2026 expecting borrowing costs to continue falling throughout the year from the last cut in December 2025, which until now had not come to fruition. 

What are the markets watching?

Recent market commentary has focused on inflation risks linked to higher energy prices and ongoing global uncertainty.

Some economists have suggested these factors could make it harder for interest rates to fall as quickly as previously expected.

While today's decision does not necessarily indicate future outcomes, it does reinforce the fact that future rate movements remain uncertain.

Good news as buy to let rates come down

A flurry of lenders have reduced a range of buy to let mortgage rates by up to 20 basis points, which is great news for landlords and a positive, long awaited change. Some investors were holding off from securing a new finance deal in anticipation that this would happen and hopefully can now move ahead.

Given there is still a great deal of uncertainty overseas, a practical approach for those needing finance is to take advantage of rate drops and secure a mortgage offer, with a view to monitoring for further positive change, whilst protecting against the possibility of rate rises.

What should you do now?

If you have a mortgage deal that is due to expire in the coming months, now is a great time to start investigating your options. Rate reductions are what landlords have been waiting for, for some time.

Many lenders allow borrowers to secure a new deal six months before an existing rate expires, helping to provide greater flexibility if market conditions change.

Should further reductions occur ahead of your actual renewal date, you can re-review your options, but if rates go up, having a fixed rate offer on the table already will protect you.

What should you consider?

  • The expiry date of your current mortgage deal
  • Current borrowing remains competitive and new low rates have just been announced
  • Higher borrowing costs could affect portfolio cash flow
  • Releasing equity could support future plans
  • Locking in a fixed remortgage rate will protect you, if rates rise

Speak to a specialist mortgage advisor

Rather than attempting to predict the movement of interest rates and lenders at such a volatile time, understand the options available today, get a fixed rate mortgage offer on the table - especially with the rates cuts just released - and take back control in ensuring your portfolio remains well positioned for a range of market conditions. 

If you are reviewing an upcoming remortgage, considering releasing equity, or planning your next investment, we can help you understand the finance options available.

Contact one of our advisors today to discuss your circumstances.