TSB is increasing mortgage rates on its chosen 5-year fixed products from the 22nd of October 2025, a move that reflects heightened caution in the mortgage market as lenders respond to potential fiscal changes in the upcoming Autumn Budget. The rate changes will both affect residential and shared ownership products, with 0.10% rises on loans of 85% to 90% loan-to-value (LTV).
TSB Rate Changes Details
According to the most recent TSB news, the following rate adjustments will be in effect this week:
- 5-Year Fixed House Purchase (85–90% LTV): increased by 0.10%
- 5-Year Fixed Shared Ownership House Purchase (85–90% LTV): increased by 0.10%
Although modest, the adjustments come when the market had been anticipating more stable rates following months of swap rate volatility and lender repricing activity.
Market Caution Ahead of Rachel Reeves’ First Budget
The timing of these rate hikes is intriguing. With the first Autumn Budget from Chancellor Rachel Reeves planned for release in November 2025, market professionals are getting ready for the likelihood of shifting fiscal policy, taxation, and housing market support.
Market professionals note that lenders are adopting a “wait and see” approach, adjusting pricing to mitigate risk before potential market uncertainty.
“Whenever there is a major budget announcement on the horizon, particularly from a new government, we tend to find that lenders are tightening or rebalancing their product ranges,” says Louis Mason, Marketing and Communications Director at Oportfolio Mortgages.
“Even small movements like this 0.10% increase by TSB are symptomatic of wider uncertainty in the market. Lenders would rather not commit to anything until they can observe how the Chancellor’s plans might affect borrowing costs, consumer confidence, and demand in the housing market.”
Why Lenders Are Setting Rates Now
Some high street banks and building societies have been quietly rethinking their mortgages over the past few months.
Drivers behind this are:
- Anticipation of budget announcements that may influence inflation or interest rate expectations.
- Economic signals that the Bank of England will maintain its current base rate for longer than expected.
- Decreased demand for higher-LTV lending, particularly from buyers with lower deposits.
The result is that banks like TSB are taking positive steps to protect themselves from any surprise moves in funding costs after the Budget.
Impact on Borrowers and Homebuyers
For borrowers, the increases may equate to a few extra pounds a month on newly agreed fixed-rate mortgages. For 0.10%, it may not seem like much, but over the term of a five-year mortgage, it does add up, especially for borrowers at the more expensive end of the loan-to-value spectrum. To put the point in perspective, a borrower taking out a £300,000 mortgage could pay an extra £15–£25 per month, depending on their loan size and term. However, the market is competitive on a broad basis, with many lenders still offering five-year fixes below 5%…far less than 2023 levels.
What Do Borrowers Need to Do Now?
Borrowers approaching a remortgage or home purchase could consider fixing a rate as soon as possible because further rate movement may follow depending on the content and tone of the November Budget.
“Clients’ guidance currently is simple,” says Louis Mason.
“Apply for your mortgage early. Even if they do get better later, most lenders, and TSB, have mechanisms for switching over to a lower rate before completion. But unless it does happen to go further up, you’ll be glad you grabbed the deal when you did.”
Look Ahead to the November 2025 Budget
As the Budget announcement is only weeks away, attention will turn to whether Rachel Reeves makes announcements on policies influencing the housing and mortgage sectors, for instance, first-time buyer incentives, stamp duty reform, or changes to capital gains tax that could target the buy-to-let sector. Meanwhile, expect other lenders to make rate movements cautiously, ensuring they are prepared to move quickly once the economy’s direction is better understood.
Speak To a Mortgage Adviser
TSB’s willingness to raise 5-year fixed mortgage rates by 0.10% might feel tiny, but it is a portent for increasing caution throughout the lending market.
With the Autumn Budget 2025 looming, borrowers and brokers alike should be on high alert, the fiscal choices in the near future have the potential to reshape mortgage affordability and lender pricing throughout the UK. If you are either looking to purchase a new home or refinance your current property, you need to get ahead of rate increases. Call out team at Oportfolio Mortgages today to speak with a mortgage expert about rates. We are here to help.
