Major UK lenders such as NatWest, Santander, HSBC, Lloyds Bank, and TSB have raised selected fixed mortgage rates for the second time this month. This comes in response to "growing concerns surrounding inflationary pressures" and swap rates climbing above 4.7%. The average two-year fixed mortgage rate has risen from 4.84% at the start of March to 5.73% as of September 15, an increase of 89 basis points. A further 25 basis point rise on a typical two-year fix could increase repayments by approximately $38 per month or $456 per year. The average five-year fixed rate has also increased from 5.66% in early August to 5.78%.
This trend is noted by experts like Rachel Springall from Moneyfacts, who highlights that fixed mortgage rates are not directly tied to Bank of England base rate adjustments but are instead influenced by wholesale funding costs and swap rates. Lenders are proactively adjusting rates ahead of the Bank of England's Monetary Policy Committee (MPC) decision, with many analysts expecting a quarter-point base rate hike. Brokers are urging borrowers, especially those nearing the end of fixed deals, to act quickly as current pricing windows are narrowing rapidly.
The increases mean significant financial implications for many households. Around 750,000 households due to come off fixed-rate mortgages this year are currently paying rates below 3%, meaning they face sharp increases when refinancing. FCA data shows that the number of borrowers securing new deals up to six months before their current rate expired fell from 499,271 in Q1 2026 to 381,364 in Q2 2026. The average two-year fixed rate rising by 0.89% since March could add $131 per month, or $1,572 per year, to a $250,000 mortgage over 25 years. Opting for a fixed rate over a standard variable rate (SVR), which averages 7.13%, could still save a borrower $218 per month.
Several specific examples of rate hikes were reported: NatWest increased rates by up to 43 basis points, with a two-year fixed buy-to-let purchase mortgage at 60% loan-to-value increasing by 30 basis points to 5.5% (or 5.04% with a fee). For residential borrowers, a two-year fixed purchase deal at 60% LTV with no fee rose by 36 basis points to 5.36%. TSB announced rate rises on all fixed house purchase and remortgage rates by up to 0.25%, marking their second increase in a week. Barclays also repriced, with a 4.55% two-year fixed rate rising to 4.75%. The collective action by all of the UK's Big Six mortgage lenders underscores the challenging funding conditions in the market.
Nick Mendes, mortgage technical manager at John Charcol, notes that the mortgage market is "moving ahead of the MPC" and these changes are a result of wholesale funding costs rising due to market expectations of higher or longer-sustained bank rates, rather than a direct reaction to the latest 3.1% inflation figure. The rapid withdrawal and repricing of deals have caused the average mortgage product shelf-life to fall to 11 days in August, its shortest since April. This environment makes it critical for borrowers to secure rates promptly.
