Base rate remains on hold | will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by will always be from Be Scamsmart.

ARCHIVED ARTICLE This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.


Lieke Braadbaart

Online Writer
Published: 10/05/2018

The Monetary Policy Committee has today decided to keep the Bank of England base rate at 0.50%, with seven committee members voting to keep it on hold, and just two wanting to raise it. Considering all the speculation that has been happening over the last few months, with a rate rise almost seeming a foregone conclusion at one point, this is certainly an interesting turn of events.

While mortgage borrowers will be celebrating as base rate won't be pushing up their rates, savers are likely to be disappointed at the lack of movement. However, recent activity has seen both two-year fixed mortgage rates and certain savings rates move upwards, so it seems that neither group will have much to cheer or cry about.


According to finance expert Charlotte Nelson, "the savings market is showing some signs of positivity," with the fixed rate market seeing the largest boost. Competition among challenger banks, in combination with higher SWAP rates, appears to be fuelling this rise. As a result, "the average two-year fixed rate has climbed to 1.50% today, up from 1.17% in May 2017, while the average five-year fixed rate market has grown by 0.27% to stand at 2.08% today."

Despite this, Charlotte points out that more than 50% of the easy access market still only pays a rate that is less than 0.50%. This means that, unless you find a deal that can beat it, savers will likely remain disappointed until base rate eventually rises again.

The latest predictions indicate that this now may not happen until September, however, and as we've seen over the last month early predictions can certainly be wrong once new information comes to light. So, you might as well compare savings accounts now to try and get the best rate available, or risk your money languishing in an account that doesn't gain you any interest at all.


Those homeowners who are on a tracker rate mortgage, which follows base rate, will certainly be breathing a sigh of relief today. And yet, this doesn't mean that rates won't rise at all this year. Additionally, the recent turmoil and rampant speculation have seen rates rise already, even without base rate going up.

"Gone are the days of super-low rates, with 27 providers having increased rates in April – some doing so more than twice," comments Charlotte. "This has seen the average two-year fixed mortgage rate increase from 2.30% in May 2017 to 2.52% today."

While competition among longer-term fixed rate mortgage providers has kept the recent flurry of increases to a minimum, with the average five-year fixed rate only up by 0.02% to 2.91% over the last year, these deals are certainly not immune. Researching the market therefore remains as important as ever.

This is especially the case for borrowers who find themselves on their lender's standard variable rate (SVR), as Charlotte finds that "switching from the average SVR of 4.73% to the average five-year fixed rate would [see homeowners] around £199 a month or £2,386 a year better off [based on a £200,000 mortgage over a 25-year term on a repayment-only basis]." If you don't believe this could help you, compare the current Best Buy fixed rate mortgages to your own deal and see how it holds up.

What next?

Overall, recent movement shows that "there does not need to be a base rate rise for mortgage rates to increase," Charlotte concludes, with the same going for savings rates. Whether you're looking for a better deal or just want to protect your mortgage repayments/savings, therefore, now's as good a time as any to take a look at our Best Buys.


Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time. Links to third parties on this page are paid for by the third party. You can find out more about the individual products by visiting their site. will receive a small payment if you use their services after you click through to their site. All information is subject to change without notice. Please check all terms before making any decisions. This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

blue and green abstract pattern

Cookies will, like most other websites, place cookies onto your device. This includes tracking cookies.

I accept. Read our Cookie Policy