The base rate remains unchanged, but mortgage rates and house prices continue to fluctuate. Christina Collison has a round-up of the latest developments.

The base rate has been held at 3.75% in today's review. The Bank of England’s Monetary Policy Committee has held the rate at this level since December 2025.

The Bank of England remains cautious, despite some encouraging inflation news published on Wednesday. Inflation remained at 2.8% in May – still above the Bank's target of 2% – but lower than the predicted 3%. Food prices slowed to a 17-month low, but transport costs increased.

While the base rate is important, fixed-rate mortgage pricing is largely influenced by swap rates – the financial markets’ expectations for future interest rates.

What does this mean for mortgage rates?

When markets expect rates to rise, swap rates tend to increase, which can push mortgage pricing higher. When expectations soften, swap rates can fall, allowing lenders to reduce rates.

This means that mortgage rates can move even when the Bank of England leaves the base rate unchanged. Earlier this week, several lenders reduced their mortgage rates.

NatWest, Barclays, TSB and Santander have all recently made cuts on fixed-rate mortgage products.

What if you’re due to remortgage?

If your mortgage deal is due to end within the next six months, now is a good time to review your options. You can lock in a rate now before your current deal expires. This way, you’re protected if rates go up. If rates come down, we'll resubmit your mortgage application at no extra cost to you, so that you benefit from the savings.

Property market update

So what's happening with the property market? According to new figures from the Office for National Statistics, house prices increased by 3.8% to £270,000 in the 12 months to April 2026.

However, information released from Rightmove earlier this week covering mid-May to early June showed that asking prices for newly advertised British homes saw their biggest June fall in 14 years.

Asking prices dropped

The unusually hot weather and economic uncertainty may have affected demand. Rightmove said buyer demand fell by 10% during the unusually hot spell in May.