On November 6th, the Bank of England’s Monetary Policy Committee announced its latest decision: the UK base rate will once again be held at 4.0%.
For many, this news suggests a "steady as she goes" approach, and you might assume the mortgage market would follow suit. However, in the days since, we’ve seen the exact opposite.
If you’re a contractor, locum, or professional, you're likely watching this with keen interest. The logical question is: if the base rate is static, why are lenders suddenly cutting their mortgage rates?
Welcome to the great disconnect.
Talking to a broker early will be key
The Base Rate vs. The Mortgage Market
The Bank of England's base rate is the "official" rate, and it directly impacts those on tracker or variable-rate mortgages. But the fixed-rate deals that most borrowers favour are a different beast.
Lenders price their fixed-rate products based on future expectations, not just today's rate. They borrow money on the "swap markets," and the cost of these swaps has been falling. Why? Because the market believes the base rate will be cut in the coming months, possibly as early as December.
This, combined with fierce competition among lenders to hit their year-end targets, has ignited a full-blown mortgage price war.
What We're Seeing from Lenders
This isn't just a minor trim. We are seeing significant rate reductions from the very high-street lenders we work with daily.
In the run-up to and immediate aftermath of the "hold," intermediary-facing arms of major players—including Halifax, NatWest, Nationwide, Santander, and HSBC—have all announced cuts, slashing rates on their 2 and 5-year fixed mortgages.
For the first time in months, sub-4% deals are reappearing, and this downward trend is fantastic news for borrowers.
What This Means for Contractors and Locums
As a professional with a complex or non-standard income, this news is more than just a headline—it's a window of opportunity.
Lower rates directly improve affordability calculations and can mean saving hundreds of pounds on your monthly payments. However, this is where the opportunity meets the challenge.
While the rates are getting more attractive, the underwriting criteria from these lenders haven't necessarily gotten simpler. You still need to prove your income in a way that their credit teams understand. This is precisely the barrier that Cleerly specialise in overcoming.
At Cleerly, our expertise is in structuring your application, whether you use a limited company, an umbrella setup, or work as a sole trader. We have strong, established relationships with lenders like NatWest and Halifax. We know how to present your day rate and contract history to their underwriters to ensure you don't just see these great rates, you can actually access them.
Don't let the "base rate hold" headline fool you. The mortgage market is moving, and it's moving in your favour.
If you're coming to the end of your current deal or planning a purchase, now is the time to talk. Get in touch with our specialist team, and let's make this new rate environment work for you.