UK Mortgage Rates Soar Ahead of Bank of England Base Rate Decision
The mortgage market is experiencing its second wave of rate hikes in recent weeks, with major banks such as NatWest and Santander increasing their borrowing costs ahead of the Bank of England's base rate decision tomorrow. Since March 2026, the average two-year fixed mortgage rate has risen by 0.89%, adding £131 to monthly mortgage repayments.
According to Moneyfactscompare, swap rates have climbed above 4.70%, leading several lenders to adjust their rates, including Nationwide building society. This will be a significant blow to borrowers, who may see even higher rates if the Monetary Policy Committee (MPC) decides to increase the base rate tomorrow.
Despite economists predicting a hold this week, some forecast a 0.25% rise in November, which could add further pressure on mortgage holders. The cumulative effect of five potential base rate hikes by July 2027 would see borrowing costs rise by 1.25%, from 3.75% to 5.00%.