It has been another challenging week for UK mortgage rates.
Over the past week, a second wave of lender repricing pushed fixed mortgage rates higher, while the Bank of England voted to keep Bank Rate unchanged at 3.75%.
However, the detail behind the Bank’s decision was arguably more important than the headline.
Three members of the Monetary Policy Committee (MPC) voted to increase Bank Rate to 4%, reflecting growing concerns around inflation. Meanwhile, average two and five-year fixed mortgage rates have continued to climb.
There are some more encouraging signs from the property market. Asking prices increased in September and buyers have started returning after the summer, although affordability remains a major challenge and the number of homes available for sale means buyers still have plenty of choice.
Here’s what happened in the UK mortgage and property market between the 14th and 21st of September 2026.
Quick Answer: What’s Happening to UK Mortgage Rates?
UK mortgage rates rose again this week, despite the Bank of England keeping Bank Rate at 3.75%.
Rightmove’s mortgage data, updated on 19 September, shows the average:
- 2-year fixed mortgage: 5.42%, up 0.23 percentage points in a week
- 5-year fixed mortgage: 5.43%, up 0.23 percentage points in a week
Rates increased across several loan-to-value bands, including mortgages for borrowers with larger deposits.
The reason is that fixed mortgage pricing isn’t determined by Bank Rate alone. Expectations for future interest rates, inflation and financial-market funding costs also influence the rates lenders are prepared to offer.
That is particularly important this week because, while the Bank of England didn’t increase Bank Rate, its latest decision shows that concerns about inflation have increased.
Bank of England Holds Base Rate at 3.75%
The biggest economic event of the week came on the 17th of September, when the Bank of England announced that Bank Rate would remain at 3.75%.
The MPC voted 6–3 in favour of keeping rates unchanged.
The three dissenting members wanted to increase Bank Rate by 0.25 percentage points to 4%.
This is important for mortgage borrowers.
UK inflation increased to 3.1% in August, and the Bank expects inflation to rise further over the coming quarters. Higher energy prices linked to the ongoing conflict in the Middle East have increased concerns about inflation remaining above the Bank’s 2% target.
The Bank also noted that financial conditions have tightened and that increases in market interest rates have been passing through quickly to borrowing costs faced by households and businesses.
For mortgage borrowers, the key message is therefore:
Bank Rate staying at 3.75% does not mean mortgage rates are staying still.
Why Are Mortgage Rates Rising If the Bank of England Didn’t Increase Rates?
This is one of the most important questions for borrowers right now.
Fixed mortgage rates don’t simply move up and down every time the Bank of England changes Bank Rate.
Lenders also price mortgages according to financial-market expectations about where interest rates may go in the future.
During September, concerns about inflation have pushed up those expectations and increased the cost of fixed-rate mortgage funding.
The Bank of England itself noted this week that short-term market interest rates had risen further and that the perceived probability of near-term Bank Rate increases had increased.
That has already filtered through to mortgage pricing.
Several major lenders have repriced their mortgage ranges during September, including Santander, HSBC, Nationwide, NatWest, Lloyds Bank and TSB.
For borrowers, this is why watching Bank Rate alone doesn’t give you the full picture.
What Difference Could a 0.25% Mortgage Rate Increase Make?
Small changes in mortgage rates can have a meaningful impact on monthly repayments, particularly on larger mortgages.
For example, take a £400,000 repayment mortgage over 30 years.
At an illustrative rate of 5.00%, the monthly repayment would be approximately £2,147.
At 5.25%, that rises to approximately £2,209.
That’s around £62 more each month, or approximately £744 a year.
On a larger London mortgage, the difference becomes even more noticeable.
This is why borrowers who are already planning to buy or remortgage may want to get their options assessed early rather than waiting until the last minute.
Oportfolio Insight: Don’t Confuse a Base Rate Hold With Falling Mortgage Rates
The Bank of England holding Bank Rate might sound like good news for mortgage borrowers, but this week’s figures demonstrate why the headline doesn’t tell the whole story.
Mortgage lenders price fixed deals partly according to where financial markets expect interest rates to go next.
Right now, inflation concerns have changed those expectations.
That doesn’t mean borrowers should panic or rush into an unsuitable mortgage because rates have increased.
But if you’re already planning to move, buy or remortgage, waiting for rates to fall isn’t a strategy without risk.
Rates could come back down. They could remain around current levels. Or inflationary pressure could result in further increases.
The sensible approach is to understand what is available based on your circumstances now, how much different rate scenarios would cost you and whether a mortgage can be secured ahead of when you actually need it.
Major Mortgage Lenders Continue to Increase Rates
Mortgage repricing wasn’t limited to smaller lenders this week.
A number of the UK’s major banks have increased selected fixed mortgage rates during September as funding costs have risen.
Santander, for example, introduced further increases across its new-business and product-transfer ranges from 16 September.
Other major lenders including NatWest, HSBC, Lloyds Bank and TSB have also increased selected fixed rates this month.
Moneyfacts described this as a second wave of mortgage rate increases among major banks.
This reinforces why borrowers shouldn’t assume that a mortgage deal seen a few weeks ago will necessarily still be available today.
Mortgage products can be repriced or withdrawn quickly when market conditions change.
What Is Happening to Remortgage Rates?
Homeowners approaching the end of a fixed mortgage deal are also facing higher rates.
As of 19 September, Rightmove data showed average remortgage rates of:
- 2-year fixed remortgage: 5.45%
- 5-year fixed remortgage: 5.47%
The lowest available rates in its data were 4.69% for a two-year fix and 4.74% for a five-year fix, although the rate actually available to an individual borrower will depend on factors including LTV, affordability, loan size, property and lender criteria.
One interesting consideration for remortgaging borrowers is the difference between moving to a new lender and taking a product transfer with their existing lender.
A product transfer can sometimes be simpler, but it isn’t automatically the best option.
Comparing both routes can help establish whether staying with your existing lender or moving elsewhere offers the more appropriate overall outcome.
UK Asking Prices Rise in September
There was some more positive news from the housing market this month.
Rightmove’s September House Price Index showed that the average asking price of newly listed properties increased by 0.7%, or £2,441, to £367,440.
It was the first monthly increase since May.
That could be an early indication of the traditional autumn increase in property-market activity following the quieter summer period.
However, average asking prices remain 0.8% lower than a year ago, so this should be viewed as an improvement rather than evidence of a significant property-price boom.
Buyers Still Have Plenty of Choice
One of the most interesting aspects of the current property market is the amount of stock available.
Rightmove says there are currently more homes available for sale than at any point in the last 12 years.
That creates competition between sellers.
Nationally, buyer enquiries remain 9% lower than a year ago, despite the encouraging increase in activity seen at the beginning of September.
This means sellers may need to remain realistic about pricing, and buyers may have more negotiating power than they would in a highly competitive market.
London Remains a Challenging Market for Sellers
The difference between London and other parts of the country is particularly striking.
According to Rightmove, around 42% of homes currently for sale in London are successfully finding a buyer, compared with 91% in Scotland.
Affordability remains a major factor.
Higher property prices combined with mortgage rates above the levels available earlier in 2026 mean London buyers need to balance purchase price, deposit and monthly mortgage costs carefully.
However, London also recorded a 9% increase in buyer demand during the opening week of September, suggesting there is still significant underlying appetite from people looking to move.
For serious buyers who have their mortgage position organised, a market with more available property and motivated sellers could potentially create opportunities.
What Does This Mean for First-Time Buyers?
First-time buyers have been affected by this week’s mortgage rate increases too.
At 95% LTV, Rightmove’s average two-year fixed rate increased from 5.78% to 5.98% between 12 and 19 September.
The average five-year fix increased from 5.75% to 5.97%.
However, headline averages don’t tell the whole story.
Rightmove’s data showed the lowest 90% LTV two-year first-time buyer rate at 4.92%, considerably below the wider market average.
The mortgage available to an individual first-time buyer will depend on deposit, income, affordability, credit profile and property.
For buyers with smaller deposits, understanding the difference between 90% and 95% LTV can also be worthwhile, as moving into a lower LTV band can sometimes improve the range of products available.
What Should Remortgaging Borrowers Do?
If your current mortgage deal ends within the next few months, it may be worth reviewing your options now.
You don’t necessarily need to wait until your existing fixed rate actually expires before starting the process.
Looking early can give you time to:
- understand your current property’s LTV
- compare remortgage and product-transfer options
- check affordability with alternative lenders
- consider two-year versus five-year fixes
- review whether your circumstances have changed
- secure an available product ahead of your existing deal ending.
Importantly, securing a mortgage deal early doesn’t always mean you’re permanently committed to it.
Depending on the lender and application, your adviser may be able to review the market again before completion if conditions improve.
What Should Mortgage Borrowers Watch Next?
The next few weeks are likely to remain heavily influenced by inflation and financial-market expectations.
Three things are particularly worth watching.
Inflation: The Bank of England expects inflation to rise further over the coming quarters, with energy prices creating additional uncertainty.
Mortgage lender repricing: If funding costs remain elevated, lenders could continue adjusting fixed rates.
Bank of England expectations: The next scheduled Bank Rate decision is due on 5 November 2026. After three MPC members voted for an increase in September, future decisions will be watched particularly closely.
Borrowers should therefore be cautious about assuming mortgage rates will automatically fall before the end of the year.
Key Takeaways From the Mortgage Market This Week
Over the past week, September has brought several important developments:
- The Bank of England held Bank Rate at 3.75%
- Three MPC members voted to increase Bank Rate to 4%
- UK inflation reached 3.1% in August
- Average two and five-year fixed mortgage rates rose to 5.42% and 5.43%
- Mortgage rates increased across 60%, 75%, 90% and 95% LTV bands
- Major lenders continued repricing fixed mortgage products
- Average UK asking prices increased 0.7% in September
- There are more homes available for sale than at any point in 12 years
- London buyer demand showed an encouraging September increase, but affordability remains challenging.
In Summary
This week’s mortgage market is a useful reminder that Bank Rate and mortgage rates don’t always move together.
The Bank of England kept its headline rate at 3.75%, but inflation concerns and changing market expectations have continued to push mortgage pricing upwards.
For borrowers, that doesn’t mean rushing into a mortgage simply because rates are increasing.
But it does make preparation increasingly important.
If you’re buying a home, moving property or approaching the end of your current mortgage deal, understanding what you could borrow and what rates are available now gives you a much stronger position from which to make decisions.
Looking to Buy or Remortgage?
At Oportfolio Mortgages, we compare mortgage options across the market and assess the lenders and products that fit your individual circumstances.
Whether you’re a first-time buyer, home mover, remortgaging homeowner, self-employed borrower or looking for a larger mortgage, our advisers can help you understand what the latest market changes mean for you.
Speak to Oportfolio Mortgages today to review your mortgage options.
