UK mortgage market: Bank Rate, approvals and mortgage rates

This page tracks the numbers that shape UK mortgage costs, updated monthly and checked against primary sources. As of 29 August 2026, the Bank of England Bank Rate is 3.75%, but the average two-year fixed mortgage costs 5.62%. That gap, between the rate the Bank sets and the rates borrowers actually pay, is the single most important thing to understand about the UK mortgage market right now.

Every figure on this page carries its source and the date it was checked. Bank Rate and mortgage approvals are Bank of England data. Advertised mortgage rates are Moneyfacts averages. This page is reviewed after each Bank of England decision and after each monthly Money and Credit release.

The numbers right now

Bank Rate

Bank Rate is the interest rate the Bank of England pays to commercial banks, and the anchor for borrowing costs across the economy. It has been 3.75% since 18 December 2025, when the Bank cut it by 0.25 percentage points from 4.00%. At 3.75%, Bank Rate is at its lowest level since February 2023.

Bank Rate peaked at 5.25% in August 2023. The Bank cut it in stages from 2024 onward, most recently in December 2025, and has held it at 3.75% at every meeting since.

The balance of opinion inside the Bank has shifted during 2026. In February the vote to hold was close at 5-4, with four members wanting a cut to 3.50%. By July the split had reversed: the vote to hold was 6-3, and three members wanted a rise to 4.00%. The next decision is due on 17 September 2026, with further meetings on 5 November and 17 December.

Mortgage approvals

Mortgage approvals count lenders’ firm offers to advance money secured on a home. They are a leading indicator: an approval today usually becomes a completed transaction one to three months later, so approvals point to where housing market activity is heading.

Net mortgage approvals for house purchase rose to 58,200 in June 2026, from a revised 56,600 in May. Approvals for remortgaging rose to 34,200 from 33,800. June’s figure of 58,200 was still below the 61,400 average of the previous six months, reflecting higher borrowing costs. Net mortgage borrowing was £7.7 billion in June, up sharply from £3.3 billion in May.

Mortgage rates today

There are two ways to measure mortgage rates, and they tell different stories. The advertised averages below are what lenders are offering new borrowers now. The effective rate, further down, is what borrowers actually paid on loans drawn in a given month, which lags because many fixed-rate offers were agreed months earlier.

The most striking feature of the current market is the gap between Bank Rate and fixed mortgage rates. Bank Rate is 3.75%, yet the average two-year fixed deal costs 5.62%. That is because fixed rates are priced off financial markets, particularly gilt yields and swap rates, which reflect where traders expect interest rates to go rather than where they are today. With markets pricing in possible future rises, fixed rates sit well above Bank Rate.

The Bank of England’s effective rate on newly drawn mortgages was 4.35% in June 2026, up from 4.22% in May and its highest in more than a year. The average rate across the whole stock of outstanding mortgages reached 3.96%, also the highest on record. Around 87% of mortgage customers are on fixed-rate deals, so most households are shielded from Bank Rate changes until their deal ends.

How Bank Rate reaches your mortgage

• Fixed-rate mortgage: your rate is locked for the term of the deal, usually two or five years, and does not move with Bank Rate until the deal ends.
• Tracker mortgage: your rate is Bank Rate plus a fixed margin, so it moves in step with Bank Rate decisions.
• Standard variable rate (SVR): set by your lender, not by Bank Rate directly. Lenders often change SVRs after Bank Rate moves, but they choose the timing and amount.

Sources and next update

The next Bank of England Money and Credit release, covering July 2026, is due on 31 August 2026. The next Bank Rate decision is 17 September 2026. This page is updated after each of these.

Source: Bank of England - Interest rates and Bank Rate — Bank Rate 3.75%. Accessed 29 Aug 2026.

Source: Bank of England - Monetary Policy Committee dates — 2026 MPC meeting dates. Accessed 29 Aug 2026.

Source: Bank of England - Money and Credit, June 2026 — Released 29 Jul 2026. Accessed 29 Aug 2026.

Source: Bank of England - Money and Credit, May 2026 — Released 29 Jun 2026. Accessed 29 Aug 2026.

Source: BBC News - UK interest rates and mortgage deals (Moneyfacts data) — Rates as at 30 Jul 2026. Accessed 29 Aug 2026.