Base Rate Day Is Almost Here: What the 18 June Decision Means for Your Mortgage — and What to Do Either Way

The Bank of England's Monetary Policy Committee meets on Thursday 18 June, and it's the conversation I'm having with almost every client at the moment. The base rate has sat at 3.75% since December last year, and whichever way the Committee votes this week, the question I keep getting asked is the same one: should I be doing something right now?

Here's my honest take on where we are, and the practical steps that matter far more than guessing the outcome.

Where the market actually is

For most of this year the expectation was that rates would keep drifting downwards. That picture has become a lot less certain. Tension in the Middle East has pushed oil prices up, and that feeds through to inflation, which is currently running at around 3% — comfortably above the Bank's 2% target. When inflation looks sticky, the Bank tends to keep rates where they are rather than cutting.

So the forecasts are genuinely split. Some economists think the Bank will hold this week and may even need to raise rates later in 2026 if inflation pressure builds. Others still expect modest cuts before the year is out. There is no consensus, and anyone telling you they know for certain is guessing.

The important thing to understand is this: fixed mortgage rates don't simply follow the base rate. Lenders price their fixed deals off swap rates — the market's best guess at where interest rates are heading over the next few years. That means fixed rates can move before the Bank does anything at all. We've already seen lenders nudge pricing around in response to the wider uncertainty, with some cutting and others tightening their criteria in the same week.

In practice, that's why "waiting for the base rate to drop" is rarely a winning strategy. By the time a cut happens, much of it is usually already baked into the deals on offer.

What this means if your deal is ending

Around 1.8 million fixed-rate deals are set to expire across the UK this year. If yours is one of them, this is the single most important section for you.

Start early. With most lenders you can secure a new rate up to six months before your current deal ends. Locking something in now doesn't commit you to it — if rates improve before you complete, we can usually swap you onto the better deal. But if rates move the wrong way, you've protected yourself. It's a free insurance policy, and it astonishes me how many people leave it until the last fortnight.

Don't drift onto your lender's SVR. When a fixed deal ends and nothing is in place, you roll onto the Standard Variable Rate, which is almost always far higher than a new fixed or tracker deal. Average SVRs are sitting north of 7% at the moment — a painful place to land by accident.

Fixed or tracker? There's no universal right answer. A fix gives you certainty over your monthly payments; a tracker can be cheaper now but moves with the base rate. Which suits you depends on your budget, your appetite for risk, and how long you plan to stay put. This is exactly the sort of decision worth talking through properly rather than picking off a best-buy table.

A quieter change that's working in borrowers' favour

It's not all caution and uncertainty. One development that hasn't had nearly enough attention is the relaxation of affordability stress-testing. Lenders no longer have to test most borrowers against their SVR plus 1% on shorter fixed deals, and several major lenders have revised their criteria as a result.

For some applicants, that means a meaningfully larger mortgage is now achievable — in certain cases tens of thousands of pounds more than the same circumstances would have stretched to a year or two ago. If you were told "no" or "not quite enough" in the recent past, it may genuinely be worth revisiting. The goalposts have moved.

Five practical tips before you apply

Whatever the Bank decides on Thursday, these are the things that actually make an application go smoothly:

1. Get your paperwork together now. Three months of payslips or bank statements, your latest accounts if you're self-employed, and proof of deposit. Having it ready can be the difference between securing a rate and watching it disappear.
2. Check your credit file. Lenders reserve their best rates for clean credit histories. Look yours over, correct any errors, and don't apply for new credit in the months before a mortgage application.
3. Protect your deposit. As a rule, the bigger the deposit, the better the rate you'll qualify for. Even nudging into a lower loan-to-value band can unlock noticeably cheaper deals.
4. Be realistic about affordability. Looser stress tests don't change the fact that rates are higher than they were a few years ago. Borrow what's comfortable, not just what's possible.
5. Talk to a broker before you commit to anything. The headline rate is only part of the story — arrangement fees, early repayment charges and the small print can change which deal is genuinely cheapest for you.

My comment

We're in one of those periods where the noise is loud and the signal is quiet. Rates might hold, might rise, might ease — and you can't control any of it. What you can control is being prepared, starting early, and getting advice that's matched to your actual circumstances rather than to a headline.

If your deal is ending this year, or you're wondering whether a recent decline is worth revisiting, get in touch. I'll give you a straight answer about your options across the whole market, with no obligation.

Kindest regards

Ian

Ian A Moore CeMAP — Director, IM Mortgage Consultancy Limited

Your home may be repossessed if you do not keep up repayments on your mortgage. IM Mortgage Consultancy Limited is authorised and regulated by the Financial Conduct Authority. This article is for general information only and does not constitute mortgage advice; rates and figures quoted were accurate at the time of writing and are subject to change.