The UK mortgage market has become more challenging over the past week, with fixed mortgage rates continuing to move upwards as lenders respond to higher wholesale funding costs and uncertainty over the outlook for inflation.
Several major lenders have repriced mortgage ranges, while the latest market data shows average rates increasing across different deposit levels.
However, the housing market itself is showing some tentative signs of improvement. New buyer enquiries have become less negative according to RICS, while separate Rightmove analysis recorded a noticeable increase in buyer demand at the beginning of September.
With the Bank of England due to make its next interest rate decision on the 17th of September, borrowers now face a particularly important week for mortgage pricing.
Quick Answer: What Happened to UK Mortgages This Week?
Mortgage rates continued to rise between the 7th and 14th of September 2026, with lenders repricing fixed-rate products as higher market rates and inflation concerns put pressure on mortgage pricing.
Moneyfacts’ latest monthly data shows average two-year and five-year fixed mortgage rates rising to 4.98% and 5.02% respectively, the first month-on-month increase in eight months.
Different mortgage-rate datasets use different product sets and methodologies, so figures can vary. Rightmove’s data, updated on 12 September and based on Podium data covering around 95% of the mortgage market, put the average two-year fix at 5.19% and the average five-year fix at 5.20%, both around 0.1 percentage points higher over the week.
The picture isn’t entirely negative, however. Buyer demand increased during the first week of September, while RICS reported that several measures of housing-market activity had moved away from recent lows.
Mortgage Rates Rise for the First Time in Eight Months
Perhaps the most important development this week is confirmation that the downward trend in average fixed mortgage rates has reversed.
According to Moneyfacts’ September Mortgage Trends Treasury Report, the average two-year fixed mortgage rate increased by 0.02 percentage points to 4.98%, while the average five-year fix rose by the same amount to 5.02%.
It is the first month-on-month increase in these average rates for eight months.
The movements themselves remain relatively small, but the change in direction is significant.
During much of 2026, borrowers had become accustomed to gradually improving mortgage pricing. Recent movements in wholesale markets mean lenders are now having to reassess that pricing.
Mortgage product choice also dipped slightly below 7,000 products, while the average shelf life of a mortgage deal increased to 22 days.
This doesn’t necessarily mean mortgage rates will continue rising indefinitely, but it does reinforce why borrowers shouldn’t assume that waiting will automatically result in a cheaper mortgage.
Why Are UK Mortgage Rates Going Up?
Fixed mortgage rates don’t simply follow the Bank of England’s Bank Rate.
Lenders also consider wholesale funding costs, swap rates, inflation expectations, competition and their appetite for new mortgage business when pricing fixed-rate products.
Recent tensions in the Middle East have pushed energy prices higher and increased concerns that inflation could remain elevated. Moneyfacts has identified these developments as an important reason for the recent increase in swap rates and subsequent mortgage repricing.
The economic picture has also become more complicated.
New ONS figures released on 11 September showed that the UK economy grew by a stronger-than-expected 0.4% in July, driven particularly by a 0.4% increase in services output. GDP also grew 0.4% across the three months to July.
Stronger economic growth is positive in many respects, but when combined with concerns about energy-driven inflation, it gives the Bank of England more to consider when deciding where interest rates should go next.
Santander Announces Further Mortgage Rate Increases
Individual lender changes reinforce what we’re seeing in the wider data.
Santander announced on 10 September that it would increase most residential fixed rates and all buy-to-let fixed rates in its new-business range from the 14th of September. It also announced increases to most fixed rates in its product-transfer range.
This followed another round of increases that took effect on the 8th of September.
Nationwide also announced selected rate changes across its new-business and existing-business mortgage ranges from the 10th of September.
These changes demonstrate how quickly mortgage pricing can move.
A product available when somebody first begins looking at properties isn’t guaranteed to remain at the same rate by the time they are ready to submit an application.
Are There Any Positive Signs in the Housing Market?
Despite the increase in mortgage rates, there are some early indications that housing-market activity may be beginning to stabilise.
The latest RICS Residential Market Survey showed its measure of new buyer enquiries improving to -19% in August, its least negative reading since January and the fifth consecutive improvement.
Agreed sales also improved to -17%, the least negative reading since February, while expectations for sales over the next three months moved from -13% in July to -3%.
These figures remain negative, so they shouldn’t be interpreted as evidence of a housing boom.
However, they suggest that conditions may be becoming less weak, rather than continuing to deteriorate.
RICS described the market as gradually finding its footing while warning that any recovery remains fragile.
Buyer Demand Jumps at the Start of September
There was another encouraging signal from Rightmove data covering the first week of September.
Buyer demand increased by 5% during the week, considerably stronger than the average increase of just 0.4% recorded during the equivalent period over the previous five years.
The improvement occurred across every region.
Most interestingly for Oportfolio and our clients, London recorded the strongest increase at 9%, followed by the South West at 8%.
Buyer demand nevertheless remained 9% below the equivalent period last year, so again this should be viewed as an improvement from weak levels rather than evidence of a rapidly accelerating property market.
For London buyers, though, it is an interesting development after a prolonged period of affordability pressure and relatively subdued activity.
What Does This Mean for First-Time Buyers?
This week’s rate increases aren’t particularly welcome for first-time buyers, especially those purchasing with smaller deposits.
Rightmove’s data shows the lowest tracked two-year fixed rate at 95% LTV increasing from 4.97% to 5.14% between 5 and 12 September, while its lowest five-year rate at the same LTV increased from 4.98% to 5.14%.
However, mortgage availability remains broader than it has been historically for borrowers with small deposits. Recent Moneyfacts data recorded 464 products at 95% LTV and 896 at 90% LTV, with 95% LTV product choice at its highest level in 17 years.
So the story isn’t simply that mortgages are becoming unavailable.
There is still significant lender competition, but the price of borrowing has moved upwards.
For first-time buyers, lender affordability and criteria remain just as important as the headline interest rate.
Mortgage Criteria Are Changing Rapidly Too
Rate changes aren’t the only reason borrowers may find the mortgage market difficult to navigate.
Knowledge Bank recorded more than 6,800 lender criteria changes during August, its highest monthly total of 2026, alongside almost 6,000 new criteria additions.
Maximum age at the end of the mortgage term remained its most-searched criterion, while searches relating to joint borrower sole proprietor mortgages continued to increase.
This is relevant because two lenders offering similar interest rates can reach very different conclusions about the same borrower.
Income treatment, maximum age, property type, credit history and affordability calculations can all determine whether a particular mortgage is actually available.
Oportfolio Insight
One of the risks in a volatile mortgage market is focusing too heavily on predicting what rates will do next.
A borrower might delay because they expect rates to fall, only to find that lenders reprice upwards. Equally, choosing a mortgage purely because it has the lowest headline rate can be a mistake if the lender’s affordability calculation or criteria don’t work for the circumstances.
For our clients, the more useful approach is usually to establish what can be achieved now, while continuing to review the market where appropriate before completion.
The fact that thousands of lender criteria changes are taking place alongside frequent rate repricing also reinforces why mortgage selection is about much more than comparing percentages.
What Happens to Bank Rate This Week?
This is the major event to watch next.
Bank Rate currently stands at 3.75%, and the Bank of England’s next Monetary Policy Committee decision is due on the 17th of September 2026.
As of the 14th of September, economists surveyed by Reuters largely expect the Bank to hold Bank Rate at 3.75%, although markets have begun pricing some risk of an increase as higher energy prices create renewed inflation concerns.
That is a significant change in tone from earlier expectations that the next meaningful move in interest rates might be downwards.
However, forecasts can change quickly, and we won’t know the MPC’s decision until it is announced.
Whatever happens on the 17th of September, it is also important to remember that a Bank Rate decision doesn’t translate directly or immediately into equivalent changes to fixed mortgage rates.
What Should Mortgage Borrowers Watch Next?
The Bank of England decision on the 17th of September will dominate the coming week.
Borrowers should also watch:
- whether swap rates continue to rise or begin to stabilise
- whether more lenders increase fixed mortgage rates
- how markets react to the Bank of England’s inflation outlook
- whether the recent improvement in buyer demand continues
- lender-specific changes to affordability and mortgage criteria.
For borrowers already looking to buy or approaching the end of an existing fixed rate, the important point is that mortgage pricing is moving again.
That makes understanding the options available for your circumstances more useful than trying to predict the exact point at which rates might peak or fall.
Key Takeaways
- Average two-year and five-year fixed mortgage rates have risen month-on-month for the first time in eight months, according to Moneyfacts.
- Rightmove’s tracker showed average two-year fixes rising by 0.10 percentage points over the week and five-year fixes by 0.09 percentage points.
- Santander announced further increases to most residential fixed rates and all new-business BTL fixed rates from 14 September.
- RICS data suggests the housing-market slowdown may be starting to stabilise, although activity remains subdued.
- Buyer demand increased 5% during the first week of September, with London recording the strongest regional increase at 9%.
- UK GDP grew by a stronger-than-expected 0.4% in July.
- Bank Rate remains 3.75%, with the next Bank of England decision due on the 17th of September.
Speak to Oportfolio About Your Mortgage
Mortgage rates and lender criteria can change quickly, and the lowest advertised rate isn’t necessarily the most suitable or cost-effective mortgage for every borrower.
If you’re buying a property, moving home or approaching the end of an existing mortgage deal, Oportfolio can assess your income, deposit, commitments and property requirements before comparing suitable mortgage options.
Speak to our mortgage advisers to understand what the latest market changes could mean for you.
