TL;DR
Two-year fixed rate mortgages are priced at approximately 4.5-5.0% with major UK lenders as of June 2026. The Bank of England base rate is 3.75% (held June 2026, MPC 7-2). Markets are pricing a possible rise to 4.00% in H2 2026 if inflation proves persistent. Rate cuts and lower mortgage rates are not expected until 2027 at the earliest. The next BoE decision is 30 July 2026.
Last reviewed: June 2026
Key Facts
|
Current mortgage rates in the UK
Mortgage rates in June 2026 reflect the BoE base rate at 3.75% and market expectations about its future path. Fixed rates are priced off swap rates, which are forward-looking and can move before any official BoE decision. The table below is approximate; rates change daily and depend on individual loan-to-value (LTV), credit score and lender criteria.
| Mortgage type | Approx. rate (June 2026) | Rate driver |
|---|---|---|
| 2-year fixed (60% LTV) | 4.5-4.8% | 2-year swap rates |
| 2-year fixed (75-90% LTV) | 4.8-5.2% | 2-year swap rates + LTV risk |
| 5-year fixed (60% LTV) | 4.3-4.6% | 5-year swap rates |
| 5-year fixed (75-90% LTV) | 4.6-4.9% | 5-year swap rates + LTV risk |
| Tracker (base + margin) | 4.75-5.75% | BoE base rate (3.75%) |
| Standard Variable Rate | 7.0-8.0% | Lender discretion (follows base) |
LTV = loan to value. Rates are approximate and for illustrative purposes only. Source: UK mortgage market data, June 2026.
How mortgage rates are set
Fixed rate mortgages are priced primarily off swap rates: the interest rates at which banks lend money to each other for fixed periods in financial markets. Swap rates reflect market expectations about future BoE base rates. If markets expect a rate rise, two-year swap rates rise immediately, pushing new fixed rate deals higher before any official decision. Tracker mortgages adjust automatically when the BoE base rate changes at the tracker's contracted margin above base. Standard variable rates are set at each lender's discretion but historically follow base rate changes with a delay.
Forecast scenarios for H2 2026 and 2027
Rise to 4.00% in H2 2026: Two MPC members already voted for 4.00% in June 2026. If UK CPI rises above 3.25% in Q4 2026 due to energy or wage pressure, the committee may raise to 4.00% at the July or September meeting. A 25 basis point rise would add approximately GBP15 to 25 per month to a tracker mortgage with GBP200,000 outstanding and would push new two-year fixed rates toward 5.0-5.5%.
Hold at 3.75% through end of 2026: If CPI falls more quickly and the labour market remains soft, the MPC could hold for the remainder of 2026. In this scenario, fixed rates stay approximately in the current 4.5-5.0% range, with potential for modest reductions if swap markets begin pricing in 2027 cuts.
Cuts begin H1 2027: If inflation falls sustainably toward 2% by Q1 2027, the BoE could cut to 3.50% or lower. Under this scenario, two-year fixed rates could move toward 3.8-4.2% by mid-2027. This requires inflation to cooperate more quickly than the BoE's current projections indicate. Source: BoE MPC Minutes June 2026; OBR Economic and Fiscal Outlook.
Remortgaging in 2026
Borrowers whose fixed rate deals expire in H2 2026 face significant payment increases. Anyone who fixed at the historic lows of 1.0-2.0% in 2020-2021 and is rolling off onto current market rates will typically see monthly payments rise sharply. On a GBP200,000 repayment mortgage with 20 years remaining, the difference between a 2% rate and a 4.8% rate is approximately GBP400-500 per month. FCA-authorised mortgage brokers can advise on the full range of current deals and verify at fca.org.uk/firms/search.
First-time buyers
The Mortgage Guarantee Scheme (supporting 95% LTV mortgages) remains available. The Lifetime ISA allows first-time buyers to save up to GBP4,000 per year toward a deposit with a 25% government bonus up to GBP1,000 per year. Source: HM Treasury; HMRC Lifetime ISA rules (gov.uk/lifetime-isa).
Disclaimer: Mortgage rates change daily. Rates above are approximate illustrations only. Kaeltripton Ltd is not FCA-authorised. This page does not constitute mortgage advice. Always consult an FCA-authorised mortgage broker. Property values can fall as well as rise.
What are current UK mortgage rates in June 2026?
Two-year fixed rates are approximately 4.5-5.0% for borrowers with 25-40% deposits (60-75% LTV). Five-year fixed rates are approximately 4.3-4.8%. The BoE base rate is 3.75%.
Will mortgage rates go down in 2026?
Uncertain. Markets are pricing a possible rise to 4.00% in H2 2026 if inflation proves persistent. Rate cuts, which would allow new fixed rates to fall, are not expected until 2027 at the earliest based on current BoE projections.
Should I fix my mortgage now or wait?
This depends on individual circumstances. Kaeltripton does not provide personalised mortgage advice. Verify FCA-authorised broker status at fca.org.uk/firms/search.
What is the Bank of England base rate and when does it next change?
3.75%, held at the June 2026 MPC meeting. The next decision is 30 July 2026, followed by September, November and December 2026.
Sources
Bank of England Monetary Policy Summary June 2026 (bankofengland.co.uk); ONS Consumer Price Inflation May 2026 (ons.gov.uk); ONS UK House Price Index (ons.gov.uk); HM Treasury Mortgage Guarantee Scheme (gov.uk); HMRC Lifetime ISA (gov.uk/lifetime-isa); FCA mortgage broker register (fca.org.uk/firms/search); UK Finance Mortgage Trends June 2026 (ukfinance.org.uk).
