By clicking a retailer link you consent to third-party cookies that track your onward journey. This enables W? to receive an affiliate commission if you make a purchase, which supports our mission to be the UK's consumer champion.
What's happening to the base rate?
Bank of England cuts the rate to 3.75% in December – is now the time to remortgage?
If you click on the link and complete a mortgage with L&C Mortgages, L&C is paid a commission by the lender and will share part of this fee with Which? Ltd helping fund our not-for-profit mission. We do not allow this relationship to affect our editorial independence. Your home or property may be repossessed if you do not keep up repayments on your mortgage.
The Bank of England has decided to cut the base rate to 3.75%.
Its nine-member Monetary Policy Committee (MPC) voted by a narrow 5-4 majority to drop the rate by 0.25 percentage points. Four members voted to maintain the rate at 4%.
Read on to find out what the decision means for you – whether you're buying a home, are due to remortgage or are trying to get the best return on your savings.
Be more money savvy
free newsletter
Get a firmer grip on your finances with the expert tips in our Money newsletter – it's free weekly.
This newsletter delivers free money-related content, along with other information about Which? Group products and services. Unsubscribe whenever you want. Your data will be processed in accordance with our privacy notice.
Why has the Bank of England cut the base rate?
In November, the MPC judged that inflation had peaked but felt there was insufficient evidence that inflationary risks had fallen far enough to justify a rate cut.
Since then, inflation figures for October and November have shown a downward trend. The November data, in particular, revealed a sharper-than-expected fall, with inflation dropping from 3.6% to 3.2%. While experts had anticipated a decline, forecasts had suggested a reduction of just 0.1 percentage points.
Consequently, in its December meeting, the committee noted that the 'risk from greater inflation persistence has become somewhat less pronounced'.
However, the MPC also cautioned that the risk of inflation remaining elevated over the medium term hasn't disappeared.
Experts predicted that this rate cut was nailed on following the release of the latest inflation figures. However, the narrow margin of the vote could mean it's unlikely that the base rate will be cut again when the MPC meets in February.
Those with a tracker mortgage will feel the benefit immediately. Tracker mortgages, which are linked to the base rate, will drop by 0.25 percentage points. Borrowers who have had a tracker mortgage since the start of 2025 will have found their mortgage rate drop by a whole percentage point in 2025.
If you're currently on a standard variable-rate mortgage, your rate may fall if your lender decides to pass on the cut.
The cut is good news for remortgagers, as the impact of the rate cut has already pushed fixed mortgage rates lower in recent weeks.
Further good news may also be on the way. David Hollingworth of L&C says: 'Although lenders are already pricing in further rate cuts next year, there is still scope for market expectations to shift, allowing rates to drift down further.'
Our table shows the current top rates for two-year fixed-rate remortgaging deals across a range of LTV bands.
Two-year fixed-rate
60%
Halifax
72%
3.61%
£1999
7.49%
Two-year fixed-rate
60% fee free
Santander
73%
3.97%
£0
6.75%
Two-year fixed-rate
75%
Santander
73%
3.72%
£1999
6.75%
Two-year fixed-rate
75% fee free
Leeds Building Society
68%
4.08%
£0
7.74%
Two-year fixed-rate
85%
Newcastle Building Society
n/a
4.70%
£999
6.50%
Two-year fixed-rate
85% fee free
Newcastle Building Society
n/a
4.85%
£0
6.50%
Two-year fixed-rate
90%
Skipton Building Society
80%
4.19%
£1495
6.54%
Two-year fixed-rate
90% fee free
Skipton Building Society
80%
4.44%
£0
6.54%
Five-year fixed-rate
60%
Santander
73%
3.71%
£1999
6.75%
Five-year fixed-rate
60% fee free
Santander
73%
3.92%
£0
6.75%
Five-year fixed-rate
75%
Santander
73%
3.80%
£1999
6.75%
Five-year fixed-rate
75% fee free
Santander
73%
4%
£0
6.75%
Five-year fixed-rate
85%
RECOMMENDED PROVIDER
Nationwide Building Society
80%
4%
£1499
6.74%
Five-year fixed-rate
85% fee free
Clydesdale Bank
74%
4.22%
£0
6.99%
Five-year fixed-rate
90%
RECOMMENDED PROVIDER
Nationwide Building Society
80%
4.23%
£1499
6.74%
Five-year fixed-rate
90% fee free
First Direct
75%
4.39%
£0
6.49%
Data from Moneyfacts. Collected on 18 December.Customer scores are based on a survey of 5,016 members of the public in August-September 2025 and combine overall satisfaction with likelihood to recommend the provider. See our methodology and brand sample sizes here. The average customer score is 74%. To become a Which? Recommended Provider a lender must get a top customer score, consistently offer competitive deals and be fully covered by the Financial Conduct Authority banking standards regime. 'Revert rate' is the standard variable rate (SVR), which is the mortgage rate you'd be transferred onto when your deal ended if it remained unchanged between now and then.
What this means for home-movers and first-time buyers
Many home movers and first-time buyers put their plans on hold until after the Budget. If you're planning to up sticks in the new year, there is hope that you could benefit from a combination of a lower base rate and increased lender competition.
Simon Gammon, from Knight Frank Finance, says: 'Lenders have been trimming mortgage rates for several weeks, but today’s decision adds momentum to what we expect to be a highly competitive January. With new lending targets in place, lenders are likely to undercut one another in a bid to win early-year business. It's not impossible that we see two-year fixed rates below 3% by spring.'
The table shows the current top rates for five-year fixed-rate mortgages for home-movers.
Two-year fixed-rate
60%
NatWest
73%
3.62%
£1495
6.99%
Two-year fixed-rate
60% fee free
Barclays
75%
3.82%
£0
5.99%
Two-year fixed-rate
75%
Barclays
75%
3.70%
£899
5.99%
Two-year fixed-rate
75% fee free
Barclays
75%
3.90%
£0
5.99%
Two-year fixed-rate
85%
Yorkshire Building Society
74%
3.90%
£995
5.99%
Two-year fixed-rate
85% fee free
First Direct
73%
4.07%
£0
6.49%
Two-year fixed-rate
90%
Skipton Building Society
80%
4.14%
£1495
6.54%
Two-year fixed-rate
90% fee free
Virgin Money
74%
4.23%
£0
6.99%
Two-year fixed-rate
95%
Yorkshire Building Society
74%
4.68%
£995
5.99%
Two-year fixed-rate
95% fee free
NatWest
73%
4.74%
£0
6.99%
Five-year fixed-rate
60%
NatWest
73%
3.75%
£1495
6.99%
Five-year fixed-rate
60% fee free
Barclays
75%
3.88%
£0
5.99%
Five-year fixed-rate
75%
Barclays
75%
3.86%
£899
5.99%
Five-year fixed-rate
75% fee free
Barclays
75%
3.94%
£0
5.99%
Five-year fixed-rate
85%
Virgin Money
74%
4.02%
£999
6.99%
Five-year fixed-rate
85% fee free
Virgin Money
74%
4.09%
£0
6.99%
Five-year fixed-rate
90%
NatWest
73%
4.20%
£995
6.99%
Five-year fixed-rate
90% fee free
Virgin Money
74%
4.31%
£0
6.99%
Five-year fixed-rate
95%
Leek Building Society
N/A
4.61%
£995
7.34%
Five-year fixed-rate
95% fee free
NatWest
73%
4.72%
£0
6.99%
Data from Moneyfacts. Collected on 18 December.Customer scores are based on a survey of 5,016 members of the public in August-September 2025 and combine overall satisfaction with likelihood to recommend the provider. See our methodology and brand sample sizes here. The average customer score is 74%. To become a Which? Recommended Provider a lender must get a top customer score, consistently offer competitive deals and be fully covered by the Financial Conduct Authority banking standards regime. 'Revert rate' is the standard variable rate (SVR), which is the mortgage rate you'd be transferred onto when your deal ended if it remained unchanged between now and then.
Ready to find your best mortgage rate?
L&C Mortgages can search through 1000s of deals to find your best mortgage rate. Plus, they won't charge you any fees for their advice.
If you click on the link and complete a mortgage with L&C Mortgages, L&C is paid a commission by the lender and will share part of this fee with Which? Ltd helping fund our not-for-profit mission. We do not allow this relationship to affect our editorial independence. Your home or property may be repossessed if you do not keep up repayments on your mortgage.
What does this mean for savers?
For savers, the news is less positive. This decision will mean that variable-rate savings accounts will have further rate cuts.
Returns from fixed-rate savings products had already fallen in the run-up to the decision, as it became increasingly clear that the base rate would be cut.
With further base rate reductions expected in 2026, fixed-rate savings are likely to continue drifting down, unless the forecasts change.
Table notes: rates sourced from Moneyfacts on 18 December 2025. 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 (a) 5% AER on balances up to £3,000
Compare savings accounts
Find the right savings account for you using the service provided by Experian Ltd
At the successful completion of your savings product application, Experian is paid a commission by the savings provider and will share a small part of the fee with Which?. This helps fund our not-for-profit mission and campaign work as a champion for the UK consumer. Which? does not allow this commercial relationship to affect its editorial independence.
When is the next base rate decision?
The first MPC meeting of 2026 is scheduled for Thursday 5 February.
The MPC will then have seven further meetings in March, April, June, July, September, November and December.
Experts forecast that it's unlikely that the Bank of England will cut the base rate again in February, but there is a possibility of another rate cut in March.
This story is regularly updated after the latest base rate decision, with rate analysis and expert views. The last update was on 18 December 2025.
