Bank of England base rate and your mortgage

Useful information

On 18 December 2025 the Bank of England base rate went down by 0.25% from 4.00% to 3.75%.

Variable rates

From 01 February 2026 we’re changing our lender variable rates.

  • Lloyds Homeowner Variable Rate will go from 7.49% to 7.24%.
  • Lloyds Standard Variable Rate will go from 6.00% to 5.75%.
  • Lloyds Buy to let Variable Rate will go from 8.34% to 8.09%.

Tracker mortgages

  • The interest rate moves in line with the Bank of England base rate.
  • These will automatically decrease by 0.25% from 01 February 2026.

If your mortgage is on a lender variable rate, we’ll let you know your new monthly payment before it is due. You can see how much your monthly mortgage payment could change and find out what happens next by using our rate change calculator.

Current Bank of England base rate

The current Bank of England base rate is 3.75%

What is the Bank of England base rate?

The Bank of England (BoE) base rate is the cost at which banks borrow money from the Bank of England. It affects interest rates for mortgages, credit cards and other types of borrowing.

Banks and Building Societies tend to charge their customers the Bank of England base rate plus a bit extra to borrow for a mortgage. 

Why does the Bank of England base rate change?

The Bank of England changes the UK base rate to try to keep the cost of living and inflation at a steady rate. It usually lowers interest rates when the economy is not doing well. This is to help people who are finding it hard to pay bills. Base rate changes are a major factor in mortgage interest rates.

How do base rate changes affect your mortgage repayments?

When the base rate goes up, your mortgage repayments may go up. If it goes down, your mortgage repayments may go down. Whether the base rate impacts your mortgage repayments or not will depend on the type of mortgage that you’ve taken out.

You could lose your home if you don’t keep up your mortgage repayments

Different types of mortgages

  • Fixed rate mortgage - A mortgage with a fixed interest rate for a set period. This means the base rate won't affect your rate when it goes up but if the base rate goes down, you won’t pay any less.
  • Tracker mortgage - Linked to the base rate. Your interest rate will change if the base rate goes up or down. This means your monthly payments can go up or down as well.
  • Lender variable rate - A variable interest rate your rate reverts to when your current mortgage deal ends – unless you have agreed to a new deal. Your interest rate will go up or down if we change our lender variable rate.

Mortgage interest rate calculator

Use our interest rate change calculator to help you see how the cost of your mortgage repayments could go up or down.

What you’ll need

  • You will need to get your remaining mortgage balance and term from your most recent mortgage statement.
  • You’ll need to know the interest rate you’ll be moving to.
Current mortgage balance

You can find your mortgage balance in your most recent annual mortgage statement.

You'll need to take into account any payments made on your mortgage since the date of the statement. If you've fallen behind with your payments on any part of your mortgage that is a repayment mortgage, you'll need to take off the amount of arrears from the current balance.

Important: If you have a mortgage made up of part repayment and part interest only, you'll need to do a separate calculation for each.
£
Remaining term

The length of time you have left to pay back your mortgage.

You can find your remaining term details in your most recent annual mortgage statement.

Important: Please check the remaining term on your main account and each sub account.
Current interest rate

This is the interest rate for your sub account on the date shown.

You can find your interest rate details in your most recent annual mortgage statement.

Important: Please check the interest rate on your main account and each sub account.
Repayment type

This your current repayment method. It can be either Repayment or Interest Only. You can find your repayment details in your most recent annual mortgage statement.
Interest rate change

Use the + or - buttons to add and deduct amounts of 0.25%. Or just type in the rate change percentage you'd like to see illustrated.
Calculate payment change

Estimated monthly payment change

Based on your inputs, if the interest rate changed from ##currentinterestrate##% to ##newinterestrate##%, the approximate change to the monthly payment would be:

£##changerepayment## per month*

* The figure shown is for illustrative purposes only.

Based on your inputs, if the interest rate changed from ##currentinterestrate##% to ##newinterestrate##%, the approximate change to the monthly payment would be:

£##changeinterest## per month*

* The figure shown is for illustrative purposes only.

What are my next steps?

Has a Bank of England base rate change affected your mortgage rate and monthly repayments? There are a few things you can do.

Switching your mortgage

Already have a mortgage with us and want to switch? Find out more about the deals.

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Mortgage calculators

See how much you could borrow and learn how remortgaging or overpaying could affect your repayments with the mortgage calculators.

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Let’s look at the details

  • You may find that your monthly payment has reduced if you have made overpayments to your mortgage. Your monthly payment will be worked out based on any overpayments you might have made. This could mean your monthly payment has come down, despite a rise in the interest rate.

  • If you’ve made plans to take out extra borrowing, a rate change won’t affect any amount that is on a fixed rate. This is because the rate change will only impact variable rates.

    For extra borrowing at a variable rate, any offer will show the interest rates that applied at the time the offer was made. If we change the variable rate after we issue the offer, we won’t write to you until you complete. When you complete, the letter will show a new monthly payment and interest rates that will apply.

  • If you’ve made plans to switch to a new fixed rate product, this won’t change in line with our variable mortgage rate changes. But, a rate change could affect a part of your existing mortgage if it has a variable rate.

    If so, we’ll work out the monthly payment on any parts of the mortgage charged at a variable interest rate. We’ll then add them to the parts with fixed interest monthly payments to give you a new total monthly payment.

  • As tracker rates are linked to the Bank of England base rate, your mortgage rate will change in line with the base rate. We’ll get in touch to tell you of the changes to your monthly payment amount.

  • If you change your mind after submitting your application, you'll need to call us straightaway.

  • Fixed interest rate

    Variable interest rate -

    Lender variable rate

    Variable tracker rate -

    Tracker rate

    Fixed interest rate

    What are the different types of rates?

    Variable interest rate -Lender variable rate

    Your interest rate stays the same for a set amount of time.

    At the end of the fixed rate period, we’ll change you to another rate. This is usually 1 of our variable rates. 

    Variable tracker rate -Tracker rate

    We set our lender variable rate and we can change it, but it will only go up if there’s a:

    • change to our cost of lending or
    • change to laws and regulations.

    Your interest rate is linked to the Bank of England base rate and changes if the base rate does.

    Your interest rate will be made up of the base rate plus or minus a %. 

    Fixed interest rate

    Can my interest rate change?

    Variable interest rate -Lender variable rate

    No, not during the fixed rate period. 

    Variable tracker rate -Tracker rate

    Yes, your interest rate will go up or down if we change our lender variable rate.

    Yes, your interest rate will change if the base rate goes up or down.

    Fixed interest rate

    Can my monthly payments change? 

    Variable interest rate -Lender variable rate

    We may update your monthly payment amount each year to make sure your payment is on track. For example, if you’ve made an overpayment.

    Variable tracker rate -Tracker rate

    Yes, your monthly payment can change if rates go up or down. If they go up, you could end up paying more than you budgeted for. 

    Yes, your monthly payment can change if rates go up or down. If they go up, you could end up paying more than you budgeted for. 

    Fixed interest rate

    Will I be charged if I overpay or pay my mortgage off early?

    Variable interest rate -Lender variable rate

    You may be charged if you repay all or part of your mortgage before the fixed rate period ends. We call this an early repayment charge.

    Variable tracker rate -Tracker rate

    You won’t usually be charged if you repay all or part of your mortgage. 

    You may be charged if you repay all or part of your mortgage in a certain amount of time after you take out a new tracker. We call this an early repayment charge. 

  • You can find your mortgage details in your most recent annual mortgage statement or from online banking. If you're not registering for online banking yet, it's easy and only takes about 5 minutes to register.

  • If your mortgage has more than 1 sub-account and some are on variable rates, you’ll need a separate calculation for each. Add each sub account calculation together to work out the total change to your monthly payment.

    You can find out if you have sub accounts on your most recent yearly mortgage statement.

    If there’s a rate change and it affects your mortgage, we’ll write to you confirming your new monthly mortgage payment before we take it.

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Already have a mortgage with us? You may be able to borrow more to make home improvements or buy something special. Or you could save money by switching to a new deal. Learn more about what you can do with your mortgage.

Existing customers

Do more with your mortgage

Already have a mortgage with us? You may be able to borrow more to make home improvements or buy something special. Or you could save money by switching to a new deal. Learn more about what you can do with your mortgage.

Existing customers