Borrowers waiting for lower mortgage rates to surface could be hundreds of pounds worse off if the Bank of England (BoE) increases the bank base rate (BBR), Moneyfactscompare.co.uk has stated.

The financial product price comparison firm’s latest research found that a 0.25% increase in the BBR would increase average mortgage payments by around £450 a year, while a 0.50% rise would mark a £906 increase.

The latest data comes after two- (5.90%) and five-year (5.78%) fixed mortgage rates hit a peak for 2026 in April. Moneyfacts stated that while rates have been on a downward trend ever since, they are still higher than at the start of March.

The firm said that heavy cuts to the BBR in the coming months are doubtful due to continued tensions in the Middle East, with the biggest high street banks having their lowest two-year fixed deals priced around 4.41% on average, which is 0.29% above the two-year swap rate.

This compares to 0.29% back in late February, when the lowest rate from the same lenders was 3.62% on average.

It has been six months since the BoE cut the BBR to 3.75%, and since then, the average standard variable rate has fallen by 0.14% from 7.27% to 7.13%,

Finance expert at Moneyfactscompare.co.uk, Rachel Springall, said that "indecisiveness could be the biggest enemy for borrowers this year", especially as speculation around an increase to the BBR lingers.

She added: "Economists expect global markets to remain unsettled, with the unrest in the Middle East now over 100 days in. Fixed mortgage rates have come down from the peaks seen in April, but any further unexpected rises will hit those who have sat on the fence before refinancing.

"Borrowers could be better off by locking into a new deal early with their existing lender, either three to six months ahead of when a fixed deal ends, but it’s also worth shopping around too. Remortgage business is expected to be rife this year, and already we have seen the highest monthly rate of approvals since 2022. It is well worth moving off an expensive revert rate, as borrowers could save around £2,800 a year moving onto a fixed rate deal."

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