Base Rate rises to 4% – what can buyers and homeowners expect now?

The Bank of England has increased the Base Rate from 3.75% to 4% today – the first increase in more than three years. 

For anyone looking to buy a home or for those coming to the end of their mortgage deal, this rise naturally raises questions about the impact on mortgage rates and affordability. 

But an increased Base Rate doesn’t necessarily mean all mortgage rates will suddenly rise. 

Here’s what the change could mean for first-time buyers and people remortgaging, with Matt Smith, our mortgage expert, explaining some of the things worth considering. 

Will fixed mortgage rates rise if Bank Rate increases? 

Not necessarily. Fixed mortgage rates don’t simply move up and down with the Base Rate. They’re influenced by financial markets and expectations about where interest rates are heading in future. That means lenders often change their fixed mortgage rates before the Bank of England makes a decision.  

Today’s increase was already widely expected by markets.  As Matt Smith explains,

“Lenders have already priced the expected increase into fixed-rate mortgages. With the Base Rate rising as expected, we won’t necessarily see significant changes in the cost of fixed mortgages purely because of the announcement.

“We have already seen some major lenders make marginal cuts to fixed rates this week. However, any reductions may initially be concentrated among mortgages for buyers with the biggest deposits,” says Matt. 

The wider economic picture matters too. Fixed-rate pricing has already been affected by changing expectations for inflation and interest rates. Global events and financial-market movements can also feed through to lenders’ funding costs.

So, the recent increases in mortgage rates have a material impact on monthly costs for home-movers. 

“There’s no getting away from the fact that home-movers have seen some notable increases to mortgage rates this year. For someone buying a typical flat, they are looking at around £150 extra per month on a new mortgage compared to the start of the year, and for someone buying a detached home it could be around £350.*” 

What about homeowners with tracker mortgages? 

For homeowners currently on tracker or variable rate mortgages, the Base Rate increase could have a more direct impact on monthly payments. 

A tracker mortgage typically follows the Base Rate, plus a set percentage. So, a percentage rise will also be reflected in tracker rates, subject to the individual mortgage terms. 

That could narrow the gap between current tracker rates and fixed-rate mortgages. Tracker mortgages can currently start below comparable fixed rates for some borrowers.  

For example, on 5th November, our mortgage rate trackers showed minimum interest rates for variable trackers starting from 4.48% for a 90% LTV, versus 5.24% for a comparable 2-year fix and 5.25% for a comparable 5-year fix*. 

Matt explains: “The impact is much more immediate for people on tracker mortgages, as their rate will increase immediately. Interestingly, tracker rates are offering comparatively good value for home-buyers at the moment, but that gap may continue to narrow with any further interest rate rises. 

“Tracker rates are currently lower than fixed rates across most LTV bands, so they may still be something some homeowners want to consider, depending on their current rates and circumstances. 

“The key factor to remember is that fixed rates reflect what lenders already expected could happen to the Base Rate and other economic factors. Lenders have been anticipating further increases after this one in November, and pricing that in early. 

So, current fixed rates are already priced considering increases for 2027, but trackers could still go up further. 

“For someone comparing a tracker with a fixed-rate deal, two important considerations are how their monthly costs could change if Base Rate rises again, and what options the mortgage provides for moving onto a fixed-rate product later.” 

What could this mean for first-time buyers? 

For first-time buyers, the predicted rise doesn’t automatically mean a fixed-rate mortgage will become more expensive for you tomorrow. The rate a buyer is offered by a lender will depend on their personal circumstances. Deposit size remains particularly important. 

Generally, borrowers with a larger deposit have access to different rates from those borrowing a higher proportion of the property’s value. Current first-time buyer deals illustrate substantial differences between loan-to-value bands.  

As Matt explains, “Three useful things for buyers to understand are what properties and asking prices are available in their local area, what their budget and deposit look like, and how much they might be able to borrow.” 

If you’re preparing to buy your first home, consider these factors when looking for the best mortgage deal: 

• Your monthly budget: what different mortgage payments would mean for your monthly finances. 

• The consistency of your income and outgoings: how the certainty of a fixed-rate compares with a tracker that could change the amount you pay each month. 

• The full cost of the mortgage deal: product fees and other charges can make a difference to the overall cost of apparently similar mortgages. 

• Getting a Mortgage in Principle: this can indicate how much they may be able to borrow and what that borrowing could cost. 

“A Mortgage in Principle can help give someone a clearer picture of potential borrowing and what that could mean for their budget. It’s also worth considering schemes such as the forthcoming Your First Home scheme, enabling extra support for first-time buyers interested in new-build homes,” suggests Matt. 

What if you’re remortgaging soon? 

Homeowners approaching the end of a fixed-rate deal in the next 6 months are likely to be considering what their best options are between fixed-rate and trackers.  

UK Finance data reports that 510,000 homeowners in the UK are currently on tracker mortgages, while 470,000 borrowers are on standard variable rate deals.*

Some mortgage offers may be available months before the existing deal expires, although the length of time varies between lenders and products. Current mortgage products have also been changing frequently, so an available deal may not remain on sale.  

Fixed or tracker: what could buyers consider? 

It’s important to remember that there isn’t one answer that will suit everyone’s situation. 

A fixed mortgage provides certainty over the interest rate for a set period. A tracker can offer a different starting rate, but repayments can change alongside the Base Rate.  

Matt Smith says conversations comparing the two options are less about guessing exactly where rates will go and more about understanding individual circumstances. 

“A mortgage adviser will want to understand someone’s circumstances, their tolerance for uncertainty and how they would cope with changing monthly payments. 

“For a tracker, one thing people can look at is how far above Base Rate the mortgage tracks. You could then see what the interest rate could become if we saw increases of another 0.25 or 0.5 percentage points. 

Finally, it’s important to remember that interest rates aren’t the only thing that affect the cost of a mortgage. Before switching between products, remember the product fees you’ll pay for moving from one to another.” 

If you’re considering your options for the future, a mortgage broker can be a valuable place to start. 

What happens next? 

After a rise, it’s worth keeping an eye on how lenders respond. Tracker rates can be expected to rise, while fixed rates can move differently as they reflect wider expectations about what might happen to interest rates in future. For anyone buying or remortgaging, comparing the rates and fees available, considering how different monthly repayments would fit within your budget, and understanding the terms of each mortgage can help build a clearer picture of the options available. 

The Monetary Policy Committee meets every six weeks to review the Base Rate, with the next meeting on the 17th December.

*Sources: Monthly change in mortgage costs calculated from average house prices in October House Price Index and average mortgage rates changing from 4.31% to 5.51% from January 2026 to November 2026 (taken from Podium data, based on 80% LTV and 30-year mortgage term); Minimum mortgage rate data from Podium (with comparable fees and LTV bands, based 95% of the market as of 5/11/26); UK Finance Mortgages Data – November 2026.  

Please note: Your home may be repossessed if you do not keep up repayments on the mortgage. Early Repayment Charges may apply if you leave your current mortgage during the fixed-rate period. Rightmove is not authorised to give financial advice; the information and opinions provided in these articles are not intended to be financial advice and should not be relied upon when making financial decisions. Please seek advice from a regulated mortgage adviser.