The last few weeks have been a reminder that mortgage markets rarely move in a straight line.
While inflation has eased and the Bank of England has held the base rate steady, mortgage pricing has seen a mixture of increases and reductions across the market. The overall picture is one of short-term volatility rather than a clear single direction.
Bank of England and the Economic Backdrop
The Bank of England’s Monetary Policy Committee voted to hold the base rate at 3.75% at its February meeting.
Since that decision, fresh inflation data has provided some encouragement. Headline inflation fell to 3.0% in January, down from 3.4% previously, helped by easing fuel and food prices.
Further commentary on the implications of this fall in inflation has suggested it could strengthen the case for a rate cut later in the year, depending on future data.
The Bank’s position remains data dependent. Although inflation has moved lower, underlying pressures in parts of the economy mean policymakers are likely to proceed cautiously rather than move aggressively.
Mortgage Rates and Lender Activity
Despite the more encouraging inflation figures, mortgage pricing has not moved in a uniform direction this month.
At the start of February, several major lenders increased fixed rates. For example, Santander adjusted selected products and updated affordability measures.
Nationwide also lifted fixed rates on parts of its range. Virgin Money and HSBC followed with rate increases across selected products.
Moneyfacts reported that although some headline rates were rising, underlying cuts still dominated in parts of the market earlier in the month.
Later reports suggested fixed rate pricing was continuing to edge upwards before flattening out more recently.
More recently, some lenders have begun trimming rates again, particularly in higher loan to value and first time buyer ranges.
Nationwide also announced reductions of up to 0.16% on selected products.
This mixture of increases and reductions highlights how competitive and reactive the market remains.
What This Means in Practice
Mortgage rates do not move directly in line with the base rate. They are influenced by swap markets, competition and lender appetite for new business.
February has demonstrated that even within a single month, pricing can rise, flatten and then reduce again.
For borrowers, this means:
- Fixed rates remain significantly lower than they were at their peak
- Short term repricing can happen quickly
- Competition between lenders remains active
At the same time, volatility has not disappeared. Inflation remains above the Bank of England’s 2% target, and market expectations can change rapidly.
Our Thoughts
The key theme this month is flexibility.
Although inflation has fallen and expectations of future rate cuts have increased, mortgage pricing has not followed a smooth downward path. Instead, lenders have been adjusting rates in response to short term market conditions.
For anyone planning to move or remortgage this year, reserving a suitable rate while retaining the ability to switch if pricing improves can provide balance between certainty and flexibility.
Mortgage rates are lower than they were this time last year. However, the market remains sensitive to economic data, and short term fluctuations should be expected rather than viewed as unusual.
As always, the right approach will depend on individual circumstances, timescales and risk appetite.
Information correct at time of writing – February 2026.
