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Base rate held again: so why are mortgage rates rising?
Bank of England maintains the rate at 3.75% in July
Sam covers personal finance topics, from the best savings rates to the reasons mortgage lenders say no. He enjoys crunching the numbers to help consumers get ahead.
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The Bank of England's nine-member Monetary Policy Committee (MPC) voted 6-3 in favour of holding the base rate for the fifth month in a row.
But how will this decision affect mortgage rates, and did the MPC give any indication of what could happen to the base rate for the rest of 2026?
Read on to find out what the decision means for you – whether you're buying a home, remortgaging or trying to get the best return on your savings.
Why has the Bank of England held the base rate?
The MPC continues to be concerned about the knock-on effect of conflict in the Middle East on the UK economy.
At its latest meeting, the MPC determined that it needs further time to understand how increased energy prices, caused by the conflict, impact inflation. As a result, it determined it was not appropriate to increase the base rate at this time.
Inflation is currently on a downward trajectory. The latest figures for June show that inflation fell month-on-month to 2.6%.
However, it remains above the Bank of England's target of 2%, and the Bank expects inflation to increase later this year, as the effects of higher energy prices filter through the economy.
Why are mortgage rates rising?
Despite another hold to the base rate, the fifth in a row, mortgage rates are rising.
The Bank of England base rate is an important metric in determining tracker mortgage rates. But for fixed-rate mortgage products, forecasts of what will happen to the base rate over the coming years are also critical. As the risk of future economic uncertainty has increased due to further conflict in the Middle East, it has made it more likely that the base rate will rise in the near future. As a result, the cost of offering fixed-rate mortgages rises for lenders, and this leads to rate increases.
In the past week, Barclays, Lloyds and Santander are some of the major lenders that have upped rates.
Rate cuts could return if the conflict in the Middle East cools. Once again, UK borrowers are at the behest of events a long way away.
Here are the best two-year fixed rates for first-time buyers:
| 60% | First Direct | 73% | 4.32% | £490 | 6.24% |
| 60% fee free | First Direct | 73% | 4.51% | £0 | 6.24% |
| 80% | First Direct | 73% | 4.57% | £490 | 6.24% |
| 80% fee free | First Direct | 73% | 4.78% | £0 | 6.24% |
| 90% | West Brom Building Society | N/A | 4.78% | £1,499 | 6.24% |
| 90% fee free | First Direct | 73% | 4.99% | £0 | 6.24% |
| 95% | West Brom Building Society | N/A | 5.15% | £499 | 6.24% |
| 95% fee free | West Brom Building Society | N/A | 5.27% | £0 | 6.24% |
Tracker mortgages are rare but cheaper
If you are looking for the lowest-possible rate, trackers continue to be the only mortgage type that offers rates of less than 4%. But the sub-4% mortgage is a dying breed. At the start of July, there were 17 and now (30 July) there are just two.
However, you may not be able to access these deals. One, offered by Barclays, is only available to Premier customers. To be a Barclays Premier customer, you must have an annual income of at least £75,000 or a minimum of £100,000 in savings or investments. The other, offered by Nationwide Building Society, is only available to existing customers.
Before choosing a tracker, borrowers need to be comfortable with the possibility that their rate could increase. David Hollingworth, a mortgage expert from L&C, advises: 'Trackers are therefore better suited to those with some flex in their disposable income. Trackers are more widely available without any early repayment charges, though, so they do at least allow an exit route if rates take another turn and climb steeply.'
The table shows the best tracker rates for those remortgaging that are available widely:
| 60% | Halifax | 72% | 4.06% | £1,499 | 7.24% |
| 60% fee free | Principality Building Society | 80% | 4.45% | £0 | 6.25% |
| 70% | HSBC | 73% | 4.17% | £999 | 6.24% |
| 70% fee free | Principality Building Society | 80% | 4.5% | £0 | 6.25% |
| 80% | Halifax | 72% | 4.23% | £1,499 | 7.24% |
| 80% fee free | Principality Building Society | 80% | 4.65% | £0 | 6.25% |
- Find out more: best mortgage rates and deals 2026
What will happen to the base rate in 2026?
The latest decision to hold the base rate had a strong majority (6-3). However, one extra member of the MPC committee voted to increase the base rate than at the previous meeting. This doesn't mean that a base rate increase is likely at the Bank of England's next meeting in September, but many will be watching to see if the vote share changes and what that could indicate about future decisions.
At the height of the conflict in the Middle East, some predictions pointed to three base rate increases. These have been revised down, as tensions have cooled in the region.
Experts are now generally forecasting a level base rate for 2026. For example, Barclays Research and Lloyds Bank both expect no further increases to the base rate this year.
What does this mean for savers?
One upside of the continued market turmoil is that returns from fixed-rate savings accounts are increasing. Fixed savings rates have hit their highest level since 2024, according to Moneyfacts analysis.
If you have a variable-rate savings account, today’s decision means your rate will remain unchanged.
Here are the top accounts available right now.
- Find out more: best savings rates 2026
| Instant access | Cahoot | 5% (a) | n/a | £1 | Internet | Monthly, yearly |
| One-year fixed rate | GB Bank | 4.92% | n/a | £1,000 | Internet | Monthly, on maturity |
| Two-year fixed rate | GB Bank | 4.85% | n/a | £1,000 | Internet | Monthly, yearly |
| Three-year fixed rate | Investec Save | 5% | n/a | £5,000 | Internet | Yearly |
| Four-year fixed rate | Aldermore | 4.61% | 74% | £1,000 | Internet | Monthly, yearly |
| Five-year fixed rate | Atom Bank | 5% | 76% | £50 | Mobile app | Monthly, yearly |
Table notes: Rates sourced from Moneyfacts on 30 July 2026. Provider customer score is based on savers' overall satisfaction with the brand and how likely they are to recommend it to others. n/a means sample size was too small for us to generate a provider score. Deals marked 'Raisin exclusive' are available only through Raisin UK, a savings platform. (a) 5% AER on balances up to £3,000.
When is the next base rate decision?
The next MPC meeting is scheduled for Thursday, 17 September.
The MPC will then have two further meetings this year in November and December.
This story is regularly updated after the latest base rate decision, with rate analysis and expert views. The last update was on 30 July 2026.
