UK Mortgage Rates Surge Ahead of Bank of England Decision

UK mortgage rates have increased for the second time in September as lenders including NatWest, Santander, HSBC, Lloyds Bank, and TSB raised borrowing costs ahead of tomorrow's base rate decision by the Bank of England.

The average two-year fixed mortgage rate has risen to 5.73% from 4.84%, adding £131 to monthly repayments or £1,572 per year on a £250,000 loan over 25 years, according to Moneyfactscompare analysis.

Finance expert Rachel Springall warned that other lenders may follow suit and adjust rates, potentially leading to higher borrowing costs as some deals have been withdrawn from the market.

The average five-year fixed mortgage rate has also increased to levels not seen since April, adding to borrowers' woes. Economists expect a hold this week, but a rise of 0.25% in November and four out of five policy decisions between February and July 2027 may see base rate hikes.