Base Rate Holds at 3.75% as Santander Cuts Mortgage Deals

It's been a week of mixed signals for anyone navigating the UK property market. The big news is that the Bank of England's Monetary Policy Committee (MPC) decided to keep the Base Rate steady at 3.75% at their meeting ending 29 April 2026. This offers a moment of calm for many, especially those on variable rate mortgages or nearing the end of their fixed terms.

This decision wasn't unanimous, though. Eight members voted to hold the rate, but one preferred a 0.25 percentage point increase, pushing it to 4%. This split vote reminds us that the future path of interest rates isn't set in stone.

What Changed and By How Much?

The Bank of England's Base Rate has been held at 3.75%. This is the rate that influences what banks charge for loans, including mortgages. For now, it means no immediate hike in monthly payments for those on tracker or standard variable rate (SVR) deals linked directly to the Base Rate.

Good news on the inflation front: UK Consumer Price Index (CPI) inflation fell to 2.8% in April 2026, down from 3.3% in March. This dip in inflation often eases pressure on the Bank of England to raise rates, which can be a positive sign for future mortgage affordability.

On the lending side, Santander has been quick to react, cutting mortgage rates across several of its key product ranges this week. While specific percentage cuts weren't detailed, any reduction from a major lender can spark competition and potentially lead to better deals across the market.

Scenario: What This Means for You

Let's look at how these changes might affect different groups:

• If you're a homeowner on a variable rate: The Base Rate hold means your payments won't immediately increase. However, keep an eye on lender-specific SVRs, as these can change independently.
• If your fixed-rate deal is ending soon: The stable Base Rate and falling inflation could mean that new fixed-rate deals might not be as high as some had feared. It's a good time to start comparing offers.
• If you're a first-time buyer saving for a deposit: While mortgage rates are a key factor, don't forget your savings. A Lifetime ISA (LISA) is a must-consider for first-time buyers under 40, offering a 25% government bonus on contributions up to £4,000 per year, meaning you could get £1,000 free from the government annually. For other tax-free savings, a Cash ISA is a solid choice. Remember your Personal Savings Allowance, which allows you to earn a certain amount of interest tax-free outside of an ISA. Always check if a savings rate is variable or includes a temporary bonus that may expire.
• If you're a renter: The buy-to-let market is seeing steady sentiment, but Barclays reports that most homeowners are unwilling to become landlords. This could mean continued pressure on rental supply, potentially impacting future rental prices.

Step-by-Step: What to Do Right Now

1. Review your current mortgage: If you're on a variable rate, understand how it's linked to the Base Rate. If your fixed term is ending in the next 6-9 months, start looking at new deals.
2. Check your savings strategy: Are you maximising your ISA allowances (LISA for first-time buyers, Cash ISA for others)? Are you aware of your Personal Savings Allowance?
3. Speak to an independent mortgage adviser: They can help you compare the latest deals, including those from Santander and other lenders, and assess what's best for your individual circumstances.

When Effective

The Bank of England's Base Rate decision was effective from 29 April 2026. Santander's mortgage rate cuts are active this week, ending 22 May 2026.

Where to Get Help

For personalised advice on your mortgage options or savings strategy, reach out to an independent financial adviser or a qualified mortgage broker. They can provide tailored guidance based on your financial situation.

But There Are Risks

While the Base Rate hold offers some relief, the fact that one MPC member voted for a rate hike shows that the possibility of future increases isn't off the table. Furthermore, while buy-to-let sentiment is steady, it's described as being 'amid a negative economic outlook', which could still lead to caution from investors and landlords.

This is not financial advice. Seek independent mortgage guidance. Savings rates shown may be variable and include introductory bonuses. Interest may be taxable above your Personal Savings Allowance.