Fixed rates have already climbed nearly a full point this year
Major UK lenders have raised fixed mortgage rates for the second time this month, widening the gap between fixed pricing and the Bank of England's Bank Base Rate (BBR), which has held at 3.75% since July. The Bank's Monetary Policy Committee is due to vote on rates this week.
NatWest, Santander, HSBC, Lloyds Bank and TSB have raised selected fixed rates twice since early September, according to Moneyfactscompare.co.uk, after swap rates climbed above 4.70%.
This is not the first such round this year. In March 2026, Barclays, HSBC, Lloyds Bank, NatWest and Santander already raised rates as swap costs rose, with Springall noting at the time that the increases stemmed from global pressures rather than UK fiscal policy — the same dynamic behind the latest round.
Bank of England data illustrates the scale of that divergence. The typical two-year fixed rate at 75% loan-to-value rose from 4.20% in December 2025 to 4.92% by July 2026, even as the BBR has held at 3.75% for every policy decision so far in 2026.
Rachel Springall, finance expert at Moneyfactscompare.co.uk, said fixed rates "are not intrinsically linked to adjustments to the Bank of England Base Rate (BBR)," adding that the latest increases came "in reaction to growing concerns surrounding inflationary pressures."
She said other lenders were likely to follow, and that any withdrawn deals returning to market could be priced higher. Building societies, including Nationwide, have also repriced twice this week; the average two-year fixed rate is now at its highest since June, and the average five-year fixed has returned to levels last seen in April.
How this round compares with earlier repricing
Moneyfacts data shows the average mortgage product shelf-life fell to 11 days in August, the shortest since April, as lenders withdrew and repriced deals in response to swap-rate movements.
Since the start of September specifically, only a small number of lenders have pulled fixed-rate products entirely, with Family Building Society among them — a more contained response than in March 2026, when numerous lenders withdrew or rapidly repriced across their ranges.
Not every lender has moved the same way. First Direct cut rates across most of its fixed range by up to 0.19 percentage points from September 2, including on a 95% loan-to-value two-year fix for first-time buyers, even as most lenders have raised prices since mid-July on renewed global tension pushing swap rates higher.
The cost so far
Since March 2026, the average two-year fixed rate has risen 0.89%, from 4.84% to 5.73%, adding £131 a month, or £1,572 a year, to a £250,000 mortgage over 25 years. A further 0.25% rise, to 5.93%, would add about £38 a month, or £456 a year, on the same terms. The Moneyfacts Average New Mortgage Rate now stands at 5.68%, up from 5.59% in August and 4.90% in March.
Separate Moneyfacts modelling estimates a 25-basis-point rise adds roughly £13 a month for every £100,000 borrowed.
An early rush to refinance
Financial Conduct Authority (FCA) data shows 381,364 mortgages were secured up to six months ahead of maturity in Q2 2026, down from 499,271 in Q1 — almost 900,000 combined across the two quarters. The Bank of England estimates 750,000 households with a fixed rate expiring in 2026 currently pay rates below 3%.
UK Finance puts the wider 2026 maturity wall at around 1.8 million fixed-rate mortgages, many taken out at sub-3% rates during 2020 and 2021 and now rolling onto pricing several percentage points higher.
UK Finance forecasts external remortgaging growing 10% to £77 billion in 2026, with product transfers, where borrowers stay with their existing lender, adding a further £261 billion.
The pattern extends to buy-to-let, where 57% of leveraged landlords arranged a new loan, remortgage or product transfer in the 12 months to June 2026, matching a record previously set in late 2025.
What the shift means for brokers
As of last year, product transfers typically carried a lower procuration fee for brokers than a full remortgage — commonly around 0.2%, against a fuller rate for new business — though a small number of lenders, including Halifax and TSB, paid the same fee for both.
As product transfers account for a growing share of overall refinancing activity, the balance between advice workload and broker remuneration remains a live discussion point across the intermediary sector.
Not every lender allows customers to lock into a new deal up to six months ahead of the end of a fixed term, despite the government's Mortgage Charter, and lenders and brokers are advised to explain the implications of ending a deal early, including early repayment charges.
The Bank of England's next move
The Bank has held the BBR at 3.75% since a 6–3 vote at the end of July.
Chief economist Huw Pill was among the three members who favoured a rise at that meeting. In a speech on September 7, ahead of the Committee's next vote, Pill argued that a 25-basis-point increase to 4% would send a "clear and unambiguous signal" on inflation risks, warning that delay risked a "bias to the status quo" as energy-related pressures persisted.
Governor Andrew Bailey has maintained a more cautious tone, citing continued uncertainty over the Middle East. Markets are currently pricing at least one BBR rise before the end of the year.
There is also speculation that four of the five policy decisions between February and July 2027 will bring further increases, a cumulative 1.25% that would take the BBR from 3.75% to 5.00%.
A government bond sell-off since the start of September has added to that pricing, with investors betting on three BBR rises over the next two years. Two-year gilt yields have climbed above 4.5% and ten-year yields above 5.25%, their highest level since August 2007.
Gilt yields feed directly into swap rates, which lenders use to price fixed mortgages, meaning further bond-market movement could continue to influence fixed pricing regardless of the BBR decision itself.
Springall said borrowers unable to secure a new deal, particularly five-year fixed customers not due to refinance until 2027, continue to face difficulty. Sub-2% fixed mortgages were available as recently as February 2022, meaning moving off them "will be a huge shock for borrowers."
Securing a fixed rate rather than reverting to a standard variable rate (SVR) could save a borrower £218 a month, Springall said. The average SVR is 7.13%, equating to £1,787 a month on a £250,000 mortgage over 25 years, against £1,569 on a 5.73% two-year fixed rate.
Ian Harris, president of NAEA Propertymark, said rising rates would concern homeowners and buyers facing affordability pressures, with borrowers facing greater uncertainty over costs.
He said those ending historically low fixed-rate deals could see a significant repayment rise, adding: "This underlines the importance of consumers engaging with a qualified mortgage adviser and exploring their options as early as possible, rather than waiting until their existing deal expires."
He called for government, lenders and the wider industry to work together, saying clear information, advice and a competitive range of products remain vital to maintaining activity and confidence in the housing market.
