What are they telling clients ahead of the central bank’s rate call?
With the Bank of England’s Monetary Policy Committee due to meet on Thursday, brokers expect the Bank Rate to remain at 3.75% and are steering clients away from attempting to second‑guess the decision, instead highlighting product flexibility, overpayments and protection as the priorities in the current market.
The backdrop is one of inflation still above target but easing, and a series of rate cuts since mid‑2024 after an extended tightening cycle. Against that setting, brokers interviewed by Mortgage Introducer see next week’s call as a pause rather than a turning point, with any further easing this year likely to be gradual.
Luke Spellman (pictured top left), financial advisor at Spellman Financial Services, expects no change. He pointed to the Bank’s signalling that any future cuts would be “slow and steady” and described current levels as broadly workable for borrowers, even if lower rates would be welcome.
Joanna Streames (pictured top centre), mortgage adviser at Velvet Mortgage & Insure Services, also anticipates a hold. She argued that while inflation has come down from its peak, it is not yet at a point where the Bank is ready to cut again and characterised the meeting as a “pause and assess” moment for policymakers in a fragile economy.
Paul Hampton (pictured top right), mortgage consultant at Approved Mortgage Solutions, likewise expects the base rate to stay put, citing inflation that is “not on target but it’s not out of control”, rising unemployment and a housing market that remains “reasonably buoyant”. In his view, those mixed signals support a cautious stance.
‘Do not try to time the Bank’
Across the board, advisers say borrowers should not be guided by the headlines around the Bank’s announcement.
“Don’t try to time the decision,” Spellman said. “Fixed rates are usually priced in ahead of the meetings and very little happens in terms of changes to fixed rates immediately after the Bank’s decision.”
Streames made a similar point about separating noise from individual needs. “We’re advising clients not to panic but also not to procrastinate,” she said. “Rate announcements grab headlines and cause lots of extra enquiries, but the best mortgage decisions are still driven by individual circumstances, not guesses about next week’s news.”
For clients coming to the end of a deal, she is urging early action with built‑in optionality. Borrowers are being encouraged to secure a product in advance, with the ability to switch later if pricing improves; if rates instead move higher, they retain the lower rate already booked.
Hampton, meanwhile, underlined that the link between Bank Rate and fixed mortgage pricing is often misunderstood. “Most of our clients need a little bit of security at the moment and over 90% of our clients are choosing fixed rates,” he said. “A base rate reduction does not have a direct effect on swap rates which are the underlying drivers of what fixed rates are available.”
Fixed rate dominance, but flexibility in demand
All three brokers report that fixed rates remain the default choice for the majority of borrowers, reflecting a preference for payment certainty after a volatile period. Spellman said he still views trackers as unsuitable for most clients at present, with both two‑ and five‑year fixes in demand depending on attitudes to risk and expectations for future rates.
At the same time, there is a growing emphasis on flexibility, particularly around early repayment charges and overpayment allowances. “Flexibility is king right now so the lower the ERCs the better, and this is more important than ever,” Streames said. She added that “Overpayment-friendly mortgages are more relevant these days so the lenders that allow 20% are often popular as savvy borrowers want to get things paid down more compared with the days when we had those lovely low rates for a decade averaging 1-3%.”
For borrowers who are unsure about committing to a new fixed deal, both Streames and Hampton see a role for certain tracker products. “Trackers with no ERCs are a great product for some clients right now,” Streames said.
Hampton also noted that “A couple of lenders have fee-free base rate trackers with no early repayment charges. They are a brilliant alternative to the standard variable rate for clients who are undecided and not ready to commit to another fixed rate just yet or simply want to keep their options open but avoid standard variable rate and the higher payments it brings.”
Streames argued that product selection is increasingly about resilience rather than headline pricing. “This is no longer about chasing the lowest headline rate but rather it’s about control, options, and resilience,” she said.
Rate outlook: slow cuts and no return to ultra‑low pricing
On the trajectory for the next six to 12 months, the brokers are aligned around a gentle downward path rather than sharp moves.
Spellman said he hopes “slow and steady decreases continue this year” and suggested that “a further two to three reductions would be nice”, while stressing that current levels appear manageable for many and that the market is “busy as it is”. Hampton expects “a little bit of downwards movement this year, but it will be slow and gradual”.
Streames sees a similar pattern but is keen to temper expectations of a return to the ultra‑low rates of the 2010s. She said she also expects “a slow, gradual easing rather than dramatic cuts” and believes borrowers “are likely to be disappointed” if they are waiting for past lows to reappear, noting that those were “against the historical norms and for a historically long time”. In her view, the more important development is that “stability is there and shifting downwards”, which supports long‑term planning even without rock‑bottom deals.
Protection and the limits of base rate headlines
The advisers also stressed that the direct impact of the Bank’s decision will be limited for most households, given the dominance of fixed‑rate borrowing. Hampton suggested there is “always lots of excitement and posts around BoE base rate decisions” but argued that “Only a tiny amount of mortgage clients is affected by a base rate change.”
Streames warned that in a higher‑rate environment, many clients focus narrowly on mortgage costs and overlook protection. “In times like these, good advice saves more money than good timing,” he stressed.
“Borrowers always focus heavily on rates while overlooking protection such as income protection, life cover, and critical illness which becomes even more vital when household budgets are under pressure so should be there more than ever but of course, people start to look at direct debits and make cut backs.”
She linked this to a wider cultural issue, arguing that borrowers who are anxious about payments while on full income should consider how they would cope if that income fell. For her, the hallmark of “really savvy borrowing” is not just securing a competitive rate but building a relationship with a proactive broker who will “actively monitor and strategise how to get the best deal not just in the next two or five years”, rather than rolling over with a lender without review.
Spellman, for his part, highlighted the volume of questions he is receiving on overpayments, from both new and existing clients, as borrowers look to reduce balances and increase resilience.
Overall, the message from brokers ahead of the February MPC meeting is that while the Bank’s decision will command attention, most clients are better served by focusing on product structure, flexibility and protection, rather than attempting to trade short‑term moves in Bank Rate.
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