The decision

The Monetary Policy Committee voted 8 to 1 to hold the base rate at 3.75% in May. One member wanted a quarter-point rise to 4%. It was the second hold in a row and the third meeting without a cut.

On the surface that reads as bad news for borrowers. In practice, the more useful signal is what lenders are doing, and lenders have kept cutting fixed rates through the spring.

Why fixed rates fall while the base rate sits still

This is the part many investors miss. The base rate is an overnight rate. Fixed mortgage pricing is driven by swap rates, which reflect where markets expect rates to be over the next two and five years, not where they are today.

Swaps have softened on the expectation that cuts resume later in 2026. So even with the Bank on hold, two and five-year fixes have continued to drift down. The headline and the mortgage market are telling slightly different stories, and the mortgage market is the one that affects your cashflow.

What it means for buy-to-let

Three practical points:

  • Refinance windows are opening. Investors who fixed in 2023 at the peak are now finding remortgage products meaningfully below their existing rate. If you have a fix maturing in the next six months, start modelling now.
  • Stress tests are easing slowly. Lender affordability calculations loosen as pricing falls, which lifts the borrowing capacity on a given rent. Limited company products in particular have become more competitive.
  • Cash buyers have less of an edge than in 2023. As debt gets cheaper, the gap between leveraged and unleveraged returns narrows again, which favours portfolio builders using sensible gearing.

What we are doing

We are modelling every acquisition at a stressed rate, not today's rate, because the path down is not guaranteed and inflation is still sticky at 2.8%. We assume rates stay roughly where they are for the next year and treat any cuts as upside rather than a plan.

The bottom line

A hold is not a setback. With swaps softening and lenders competing, the financing backdrop for buy-to-let is quietly better in May than the base rate headline suggests. The investors who benefit are the ones who get their refinance timing right and underwrite conservatively.