The Bank of England Bank Rate is 3.75% (Bank of England, as at 7 September 2026). The Bank of England's average quoted two-year fixed rate at 75% loan-to-value was 4.92% in August 2026 (Bank of England quoted household rates). At that rate, a £250,000 repayment mortgage over 25 years costs about £1,450 a month.
Bank Rate is not your mortgage rate. A tracker moves with it. A fixed rate is priced off swap markets and does not change at all until your deal ends. A standard variable rate moves at the lender's discretion. The rate you are actually offered depends on your loan-to-value, credit profile and lender — always check current pricing directly.
UK mortgage rates in 2026 are shaped primarily by the Bank of England base rate, which the Bank of England has set at 3.75%, following a series of gradual reductions from the 5.25% peak reached in 2023 (Bank of England: Bank Rate). Lenders have passed much of this easing on to borrowers, with fixed rates falling notably from their 2023 highs.
For a borrower with a 25% deposit (75% LTV), the Bank of England's average quoted rates in August 2026 were 4.92% for a two-year fix, 4.77% for a three-year fix and 4.78% for a five-year fix. The average quoted two-year variable rate at 75% LTV was 4.23%. These are averages of the rates lenders advertise; the deal you are offered depends on the lender, the product fee and your circumstances.
Rates change frequently. The mortgage rates in this guide are Bank of England averages of quoted (advertised) rates for August 2026, published monthly. Individual lender rates move daily and vary significantly by deposit size, credit profile, property type and loan size. Always check current rates with lenders directly or via a whole-of-market broker before making any decision.
Several forces are shaping the 2026 mortgage market:
The single largest factor affecting your mortgage rate is your loan-to-value ratio — the size of your mortgage relative to the property's value. A larger deposit means a lower LTV and access to lower rates.
| Mortgage | Loan-to-value | Deposit | Average quoted rate, August 2026 |
|---|---|---|---|
| 2-year fixed | 75% | 25% | 4.92% |
| 3-year fixed | 75% | 25% | 4.77% |
| 5-year fixed | 75% | 25% | 4.78% |
| 2-year variable | 75% | 25% | 4.23% |
| 2-year fixed | 90% | 10% | 5.16% |
| 2-year fixed | 95% | 5% | 5.52% |
Source: Bank of England quoted household interest rates, August 2026 (series IUMBV34, IUMBV37, IUMBV42, IUMBV48, IUMB482 and IUM2WTL). These are monthly weighted averages of the headline rates banks and building societies advertise — not the rate any individual borrower pays, and not including product fees. The Bank does not publish a comparable series for every LTV band, so bands it does not cover are not shown. Check individual lenders for their current products.
A bigger deposit buys a lower rate. In August 2026 the Bank of England's average quoted two-year fix was 5.52% at 95% LTV, 5.16% at 90% and 4.92% at 75% — so moving from a 5% to a 25% deposit lowered the average quoted rate by about 0.6 percentage points.
Choosing between fixed and tracker is fundamentally a question of certainty vs flexibility — and your view on where rates are heading.
Your interest rate is locked for the deal period — typically 2 or 5 years. Your monthly payment does not change, regardless of what the Bank of England does with its base rate.
Your rate moves with the Bank of England base rate. If the base rate falls, your payment falls automatically.
2-year fixed at 4.92%: £1,450/month — payment locked for 2 years
5-year fixed at 4.78%: £1,430/month — payment locked for 5 years
2-year variable at 4.23%: £1,352/month — moves when the rate changes
SVR (illustrative, 7.5%): £1,847/month — avoid where possible
The table below shows monthly repayments for different loan sizes and rates on a 25-year repayment mortgage. Use this to gauge the payment impact of rate differences across your likely borrowing range.
| Loan size | 3.5% | 4.0% | 4.5% | 5.0% | 5.5% | 6.0% |
|---|---|---|---|---|---|---|
| £150,000 | £751 | £792 | £834 | £877 | £921 | £966 |
| £200,000 | £1,001 | £1,056 | £1,112 | £1,169 | £1,228 | £1,289 |
| £250,000 | £1,252 | £1,320 | £1,390 | £1,461 | £1,535 | £1,611 |
| £300,000 | £1,502 | £1,584 | £1,667 | £1,754 | £1,842 | £1,933 |
| £350,000 | £1,752 | £1,847 | £1,945 | £2,046 | £2,149 | £2,255 |
| £400,000 | £2,002 | £2,111 | £2,223 | £2,338 | £2,456 | £2,577 |
Capital repayment mortgage, 25-year term. Figures are indicative and rounded. Use the mortgage calculator for exact figures on your loan.
As a rule of thumb across typical UK loan sizes on a 25-year term:
This is why even a 0.5% rate difference matters — it is £43–£87/month on a £150,000–£300,000 loan, or £516–£1,044/year. Comparing lenders carefully, or using a broker who can access the whole market, is worth the effort.
Enter your loan size, rate and term to get a precise monthly repayment, total interest and full amortisation breakdown.
Open Mortgage CalculatorHow a rate change affects you depends on your mortgage type.
Changes to the Bank of England base rate have no direct effect on your monthly payment until your fixed deal ends. When it does, your new rate will reflect current market conditions — which could be higher or lower than your current rate.
If you are 3–6 months from the end of your fix, you can often lock in a new rate now without paying an ERC, protecting yourself against potential rate rises before your deal ends.
Each 0.25% change in the base rate translates directly to a proportional change in your payment. On a £250,000 mortgage, a 0.25% base rate cut saves approximately £35/month. A 0.25% rise adds the same amount.
SVR moves at the lender's discretion — it doesn't have to track the base rate exactly, though it typically follows directionally. As a rough guide, SVRs tend to sit a few percentage points above Bank Rate. To illustrate: at a Bank Rate of 3.75%, an SVR priced 2.5–4.0 percentage points above Bank Rate would be 6.25–7.75%. That is an arithmetic illustration, not a surveyed market range — each lender sets its own SVR and UKCalc has no authoritative source for a current market-wide figure. What is reliable is the direction: an SVR is materially more expensive than an available fixed or tracker deal. If you are on SVR, remortgaging is almost certainly worthwhile.
Scenario: £250,000 mortgage, 20 years remaining
On SVR at 7.5%: approximately £2,014/month
Remortgage to 5-year fixed at 4.5%: approximately £1,581/month
Annual saving: approximately £5,188 — worth reviewing immediately if this applies to you
With rates having fallen from 2023 highs, many borrowers who fixed in 2021–22 at historically low rates (sub-2%) are now facing a significant payment increase when their fix ends. This "mortgage cliff" has been a recurring theme in 2025–26.
The optimal window is 3–6 months before your deal ends. Most lenders allow you to secure a rate in advance with a completion date that matches your current deal's expiry. This means:
A product transfer means switching to a new deal with your existing lender, without a full remortgage application. These are typically faster and involve less paperwork. A remortgage involves switching lender, which requires a full application, credit check and property valuation but gives access to the whole market.
Product transfers are best when: your existing lender's rates are competitive, you have had a recent change in circumstances (new job, reduced income), or you want a fast transaction. Remortgaging is best when: another lender offers significantly better rates, you want to borrow more (e.g. for home improvements), or you want to change the mortgage term.
When remortgaging to a new lender, you will face a fresh affordability assessment including the mortgage stress test. If your income or outgoings have changed since your original mortgage, this can affect what you qualify for. If you are doing a simple product transfer (no additional borrowing), your existing lender may apply a lighter-touch assessment.
Check your mortgage affordability before you remortgage. Use the mortgage affordability calculator to see what a new lender would likely offer given your current income, outgoings and the new loan amount.
Disclaimer: The mortgage rates and repayment figures in this guide are for informational purposes only and use Bank of England data: Bank Rate as at September 2026, and average quoted mortgage rates for August 2026. Average quoted rates are not the rate any individual borrower will be offered. Rates vary by lender, deposit size, credit profile, property type, loan size and individual circumstances. This guide does not constitute financial advice. Always obtain personalised quotes from lenders or a regulated mortgage broker before making any borrowing decision. UKCalc is not authorised or regulated by the Financial Conduct Authority.
Sources. The statutory and regulatory figures on this page are checked against Bank of England: Bank Rate and FCA: information for consumers. Last checked 7 September 2026; figures apply to the 2026/27 tax year unless a different period is stated.