February 2026: BoE hold interest rates at 3.75%

The Bank of England has maintained its current stance, and now it is your turn to respond. The base rate remained at 3.75% on February 5, following a close 5–4 vote. This indicates that while cuts are expected in the future, they are not imminent. And now a week on, the initial headlines have faded, and what truly matters is how you adjust your mortgage and savings strategy in light of this decision.

What the February 5 Decision Really Means

The Monetary Policy Committee (MPC) kept the Bank Rate steady at 3.75% for the second consecutive meeting, with four members advocating for an immediate cut to 3.5%. The Bank’s communication suggests that if inflation continues to decrease toward the 2% target, further reductions in the Bank Rate may occur in 2026. Markets have interpreted this as “cuts later, not now,” which has influenced expectations and the swap rates lenders use to price fixed deals. This combination of a still-restrictive base rate and increasing expectations for future cuts is why your next move should be strategic, not reactive.

Mortgage Fallout: What’s Actually Changed?

For borrowers, the immediate effect is more psychological than mechanical. Although the base rate hasn’t changed, the prevailing sentiment is that we have passed the peak. Many lenders had already reduced their fixed-rate products after previous cuts, and we entered February with mortgage rates considerably more favourable than those seen in 2023–24.

Since the decision was announced, there has been some fluctuation as markets reassess the pace of potential future cuts. Some lenders have slightly increased rates due to higher swap rates, while others are maintaining competitive pricing to attract business. This behaviour is typical late in a cycle: while the significant changes have already occurred, there remains enough volatility to benefit those who pay attention.

If Your Renewal is Within 6–12 Months

If your fixed rate is set to expire in the next year, the Bank of England’s decision serves as a prompt to take three important actions. First, know your timeline: many lenders allow you to secure a new deal 4 to 6 months before your current fix ends, giving you the opportunity to lock in protection while having time to review if pricing improves.

Second, compare your lender’s product-transfer offer to whole-market alternatives. Headline rates might appear similar, but fees, flexibility, and lending criteria often differ significantly. Third, consider your risk appetite. If your budget is tight and you value certainty, opting for a stable fixed rate today may be better than hoping for a slightly lower deal later.

For example, a household transitioning from a high 4% fixed rate to something in the mid-3s could save thousands over the loan term, even if future cuts lower rates for new deals. Thus, the costliest choice is often inaction, allowing yourself to drift onto an expensive standard variable rate when your current deal ends.

Tracker, Variable, or Fixed: How to Navigate Now

With the Bank signalling the possibility of future easing, but not guaranteeing it, the choice between fixed and variable rates has become more complex. Tracker and variable-rate mortgages allow you to benefit more quickly if the MPC starts cutting later in the year, but they also expose you to the risk of slower or smaller cuts than the market currently anticipates.

Fixed rates, on the other hand, incorporate much of the expected future price changes today, providing certainty at the cost of missing out on potential benefits if the Bank acts more aggressively later. For many households, a blended approach works best: fixing for a manageable term (two to three years) at a rate that fits your budget rather than attempting to perfectly time the market.

If you are already on a tracker, now is a good time to evaluate your situation. Ask yourself: Would you be comfortable if cuts are slower than predicted or if unexpected inflation pressures the Bank to keep rates higher for longer?

Savings Strategy: Avoid Sleeping Through a Silent Rate Cut

On the savings side, a stable base rate is superficially positive since banks can maintain the same rates on reserves, but that doesn’t mean they will automatically pass on those benefits. Historically, easy-access rates tend to decrease in the weeks following a decision, while fixed-rate deals often adjust ahead of time as markets anticipate the Bank’s next moves.

Currently, the best available savings accounts remain appealing compared to recent past rates. However, if inflation continues to cool, the overall trend toward lower rates may persist through 2026. Therefore, savers who can afford to lock in funds for a term might want to secure today’s fixed rates before the market fully reflects the upcoming easing.

Regardless of your actions, be aware of your current interest rate. A surprising number of savings accounts still hold funds earning a significantly lower rate simply because people didn’t adjust after previous changes. Taking just 10 minutes to review your options could effectively provide you with a “free” pay rise.

Your “Renewal Date” Review Checklist

1. As a practical post-BoE action plan over the next few days, follow these steps:
2. Find your mortgage end date and current interest rate (check your latest statement or online portal).
3. Confirm when your lender allows you to secure a new deal (typically 4 to 6 months before your current deal expires).
4. Obtain at least two comparisons: one from your existing lender and another from a broker or financial adviser. 
5. Evaluate your budget under today’s interest rate and also at one percentage point higher and lower to understand your risk tolerance.
6. Decide what matters most to you: maximum certainty (fixed rate), flexibility (tracker or offset), or a balance of both.
7. Make a comprehensive list of every savings account, balance, and interest rate. If you have any “lazy” cash, consider moving it into a competitive easy-access account or a short-term fixed deposit if it makes sense.
8. Create calendar reminders three months and one month before your renewal date to avoid last-minute panic.
   
   

View this as a mini-annual review of your household balance sheet. The discipline you develop now will help make each subsequent Bank of England meeting feel less like a gamble and more like an opportunity to refine a plan that is already in motion.

Take Control of Your Financial Future

The decision made this February isn’t about drama; it’s about direction. The Bank has indicated that we are on a gradual path towards lower interest rates, but there’s enough uncertainty to discourage complacency. For homeowners and savers, the best approach is not to predict when the next rate cut will happen but to ensure that every pound you borrow and every pound you save is working as hard as possible in the meantime.

 If Your Renewal Date is Approaching

If your renewal date is within the next year, treat this week as your starting point. Dedicate an hour to go through your checklist. If you would like another opinion on your options, consider booking a “renewal date review” or using a product-transfer checklist to evaluate your next step before the market changes.