UK mortgage rate index 2026: average rates, Bank Rate movements and what to expect

Chandraketu Tripathi

Finance Editor, Kaeltripton

Published 10 May 2026

Last reviewed 10 May 2026

✓ Fact-checked

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TL;DR

UK mortgage rates in 2026 are significantly higher than 2020-2022 levels following the Bank of England's rate hiking cycle. Average 2-year fixed rates have fallen from their 2023 peak but remain above 4%. The Bank Rate has been cut from its 5.25% peak. Swap rates - the wholesale funding cost for fixed rate mortgages - drive fixed rate movements more than the Bank Rate in the short term. Compare deals based on the total cost including fees, not just the headline rate.

UK mortgage rates reached their highest levels in fifteen years during 2023, after the Bank of England raised Bank Rate from 0.1% in late 2021 to a peak of 5.25% in August 2023 in response to inflation. Since then, rates have begun to fall as the MPC (Monetary Policy Committee) has cut Bank Rate in a series of steps, with the rate standing at a lower level in 2026 than at the 2023 peak. However, mortgage rates for new borrowers remain substantially above the sub-2% rates available in 2020-2021, reflecting both current Bank Rate levels and the pricing of future rate expectations into swap market products.

This tracker covers average fixed and variable mortgage rate data, the Bank Rate history, what drives the rates lenders offer, and how to use this context to time a mortgage application or remortgage decision. All rate data is sourced from Bank of England Bankstats and Moneyfacts published surveys. Rates change daily; always check live rates through a mortgage broker or comparison tool before making a decision.

Key facts (2026)

Bank of England Bank Rate as of May 2026: 4.25%, down from the 5.25% peak of August 2023; the MPC has cut rates in several steps from late 2024 (Bank of England).
Average 2-year fixed mortgage rate (75% LTV): approximately 4.4% in May 2026, down from a peak of approximately 6.85% in late 2023 (Bank of England Bankstats / Moneyfacts).
Average 5-year fixed mortgage rate (75% LTV): approximately 4.2% in May 2026, reflecting the market's expectation of rate cuts extending the current level over a longer period (Bank of England Bankstats).
Standard Variable Rates (SVRs): averaging approximately 7.4% across major lenders in May 2026 - materially above fixed rate alternatives and the main financial reason for timely remortgaging (Bank of England).
Swap rates - the benchmark for fixed rate mortgage pricing - respond to financial market expectations of future Bank Rate movements, not current Bank Rate; a cut in Bank Rate does not automatically produce an immediate fall in fixed rate mortgages (Bank of England methodology).

Bank Rate history and the rate cycle

The Bank of England's Monetary Policy Committee sets Bank Rate at each of its eight annual meetings. The rate was held at a historic low of 0.1% from March 2020 through November 2021, providing exceptionally cheap borrowing conditions through the pandemic. From December 2021, the MPC began a hiking cycle, raising the rate fourteen consecutive times to reach 5.25% by August 2023 - the highest level since 2008. The MPC then held the rate at 5.25% for a year before beginning cuts in August 2024. By May 2026, Bank Rate stands at 4.25% following a series of 0.25 percentage point reductions. Market pricing in gilt and swap markets suggests the MPC may cut further through 2026 and into 2027, though the pace depends on UK inflation, wage growth, and global economic conditions. The Bank of England publishes its Monetary Policy Report quarterly with detailed forecasts; the next publication schedule is available at bankofengland.co.uk.

How fixed mortgage rates are priced

Fixed rate mortgages are priced using swap rates rather than the current Bank Rate. A swap rate is the cost at which a lender can fix the cost of its own borrowing for a specific period in the financial wholesale markets. Two-year swap rates reflect financial market expectations of where Bank Rate will average over the next two years; five-year swap rates reflect similar expectations over five years. This means that fixed mortgage rates can fall before Bank Rate is cut (if markets expect future cuts) or can rise even when Bank Rate is held (if inflation data suggests cuts are less likely). For borrowers, the practical implication is that waiting for a Bank Rate cut before locking in a fixed rate does not guarantee you will get a lower fixed rate: the rate cut may already be priced into current fixed rate products, or new data may have pushed swap rates higher before you act.

2-year vs 5-year fixed: which to choose in 2026

The choice between a 2-year and 5-year fixed rate in 2026 depends primarily on your view of where mortgage rates will be in two years' time when a 2-year fix expires. As of May 2026, 5-year rates are marginally lower than 2-year rates for most LTV bands, reflecting the market's expectation that Bank Rate will fall further over the next two to three years and that locking in for five years captures some of that anticipated fall. If rates do fall as markets expect, a 5-year fix may prove more expensive than a series of shorter deals. If rates rise unexpectedly or prove sticky at current levels, the 5-year fix provides certainty and may end up cheaper. Five-year fixes are also simpler to manage: fewer remortgage decisions, less susceptibility to rate spikes in two years, and lower administrative burden. Two-year fixes suit borrowers who expect their circumstances to change (income rise, property sale, moving home) within two years.

Standard Variable Rate risk

The Standard Variable Rate is the interest rate charged by a lender on a mortgage with no fixed, tracked, or discounted deal in place. SVRs are set at each lender's discretion and tracked Bank Rate upward through the rate hiking cycle, reaching averages of 7-9% across major lenders by 2024. While SVRs have fallen slightly as Bank Rate has been cut, they remain materially above current fixed rate alternatives in May 2026. A borrower with a £200,000 outstanding mortgage paying SVR at 7.4% instead of a 5-year fix at 4.2% is paying approximately £540 more per month in interest (on a repayment basis) than they would on the fixed rate. Over a 12-month period on SVR, this amounts to approximately £6,500 in additional interest payments, which underlines why reverting to SVR and remaining there is a significant and avoidable financial cost.

Where to find live mortgage rate data

Live mortgage rate data for UK consumers is published daily by Moneyfacts and is available through major financial comparison sites and mortgage broker platforms. The Bank of England publishes its own average rate data monthly through its Bankstats tables, which are authoritative but lag the current market by several weeks. For a current picture of available products and rates, a whole-of-market mortgage broker is the most efficient tool: brokers have access to lender systems and can provide personalised rate quotes based on your LTV, credit score, income, and property type within minutes. Many brokers provide a mortgage in principle quickly, which also gives you a reliable indication of your borrowing capacity before committing to a property search.

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Frequently asked questions

Does a Bank Rate cut automatically reduce my fixed rate mortgage?

No. Fixed rate mortgages are priced using swap rates, which reflect market expectations of future Bank Rate movements rather than the current rate. A Bank Rate cut may already be priced into fixed rates before the cut is announced, meaning there is no immediate reduction on the day. If the cut is larger than markets expected, fixed rates may fall further after announcement. Tracker and variable rate mortgages do respond directly to Bank Rate changes.

What is the Bank Rate in May 2026?

As of May 2026, the Bank of England Bank Rate is 4.25%, following cuts from the 5.25% peak of August 2023. The MPC's next decision is published on the Bank of England's website at bankofengland.co.uk/monetary-policy. The MPC meets eight times per year and publishes a full Monetary Policy Report quarterly.

Is it better to fix for 2 years or 5 years in 2026?

In May 2026, 5-year fixed rates are marginally lower than 2-year rates for most LTV bands, reflecting market expectations of further Bank Rate cuts. A 5-year fix offers payment certainty and avoids the risk of rates rising when the 2-year fix expires. A 2-year fix offers flexibility and the potential to benefit from further rate falls sooner. The right choice depends on your personal circumstances, risk tolerance, and financial plans over the next five years.

What will happen to mortgage rates in the rest of 2026?

Rate forecasts carry significant uncertainty. As of May 2026, financial markets price in further gradual cuts to Bank Rate through 2026, which, if realised, should put modest downward pressure on fixed mortgage rates. However, if UK inflation proves stickier than expected or global economic conditions change, the MPC may pause or reverse cuts, pushing fixed rates higher. Decisions should be based on your current affordability and the available products today rather than forecasts.

What is a tracker mortgage and how does it differ from a fixed rate?

A tracker mortgage follows Bank Rate directly, typically at a set margin above it (for example, Bank Rate plus 1%). When Bank Rate rises, your monthly payment increases; when it falls, your payment decreases. Unlike a fixed rate, payments are not predictable beyond the current Bank Rate. Tracker mortgages suit borrowers who can absorb payment changes and who expect rates to fall during the tracker period, or who want to avoid early repayment charges while waiting to remortgage.

How we verified this guide

All rate data and Bank Rate history were verified against Bank of England Bankstats tables, the Bank of England's Monetary Policy Committee meeting minutes, and the Bank of England Monetary Policy Report (February 2026) during May 2026. Average rates are indicative; live rates change daily. We do not accept payment from lenders and do not earn commission on mortgage referrals.

Disclaimer: This guide is information only, not financial, legal or tax advice. Rates, allowances and rules change. Always check the primary sources cited and consult a regulated adviser for decisions about your own circumstances.

Primary sources

Last reviewed: May 2026.