Average mortgage interest: Bank of England figures over time

The average two-year fixed mortgage rate in the UK was 4.92% in August 2026, up 0.82 percentage points on a year earlier¹. That is the headline official average, and it sits against a Bank Rate that the Monetary Policy Committee has held unchanged at 3.75% at its last four meetings as of mid 2026². The average rate on new fixed-rate mortgages as a whole was lower, at 4.13% in November 2025, after falling 0.6 percentage points³.

These averages answer a question almost every borrower asks at some point: what is a normal rate right now, and is the deal in front of me better or worse than that? They are not the rate anyone is offered. Averages blend every loan-to-value band, every fee structure and every lender in the market, and the rate on a particular offer depends on the deposit, the loan size, the term and the borrower's circumstances. This page explains where the official averages come from, how they have moved as Bank Rate rose from 0.1% to 5.25% and back to 3.75%, and how to read them against your own situation.

Average mortgage rates now: two-year fixes at 4.92% in August 2026

The most recent official reading of the average two-year fixed mortgage rate is 4.92%, recorded in August 2026 and up 0.82 percentage points on the same month a year earlier¹. The rise came as lenders repriced fixed deals upward even while Bank Rate itself was on hold, a reminder that the two series do not move in lockstep.

Other official series fill in the picture around that headline figure. In Scotland's housing market review for the second quarter of 2026, the average advertised two-year fixed rate for a 75% loan-to-value mortgage rose across the first months of 2026, and for a 90% loan-to-value mortgage the corresponding increase was from 4.3% to 5.3% between January and May 2026². The average rate for new fixed-rate mortgages as a whole stood at 4.13% in November 2025, having fallen 0.6 percentage points³. Earlier in 2025 the effective interest rate on new mortgages, the actual rate paid on newly drawn lending, was 4.17% in October, down from 4.19% in September⁵.

Two things follow from these numbers. First, the average depends on what is being measured: an average across all new fixed lending, an average of advertised two-year deals, and an average for a specific loan-to-value band can differ by a percentage point or more at the same moment. Second, averages move with the mix of lending as well as with pricing. When more lending shifts to lower loan-to-value bands, the average can fall without any individual deal getting cheaper.

How the Bank of England measures average mortgage interest

The "average mortgage rate" that appears in official rules has a precise definition. Under the Loans for Mortgage Interest Regulations 2017, it means "the effective interest rate (non-seasonally adjusted) of United Kingdom resident banks and building societies for loans to households secured on dwellings, published by the Bank of England"⁸. In plain terms, it is the actual interest being charged on the stock of UK mortgage lending, not an average of advertised rates, and it is calculated from data the Bank collects from banks and building societies.

The Bank publishes monthly statistical data on lending to individuals, including breakdowns by type of lender and product, and these series are the source of the average rate figures⁹. Because the series is monthly, the average moves gradually: it reflects the rates on all mortgages outstanding, including the large number still sitting on older, cheaper fixed deals, so it lags behind changes in the rates offered on new deals.

The distinction matters when a rule or a benefit refers to "the average mortgage rate". Northern Ireland's Universal Credit regulations define the standard rate used for housing support as the average mortgage rate published by the Bank of England, using the same effective interest rate definition¹⁰. Support for Mortgage Interest works the same way, as explained below. So a single Bank of England series quietly sits behind several things that affect household finances.

Bank Rate and mortgage rates: how one drives the other

Bank Rate is the core interest rate in the UK, and it is the Bank of England's job to set it¹¹. It is the rate announced from time to time by the Monetary Policy Committee as the official dealing rate, the rate at which the Bank is willing to enter into transactions providing short-term liquidity in the money markets¹¹. The Government sets the Bank a target of keeping inflation at 2%¹², and the Committee adjusts Bank Rate in pursuit of that target.

The link to mortgages runs through several channels of different strength:

• Tracker mortgages move directly with Bank Rate, charging Bank Rate plus a set margin, so a cut passes through immediately.
• Standard variable rates are set by the lender, and typically reflect changes in the Bank of England's base rate, though the lender decides the size and timing of any move¹³.
• New fixed-rate deals are priced on market rates that anticipate where Bank Rate will go over the fix, so they can move between decisions, and sometimes in the opposite direction to the last announcement.
• Existing fixed deals are unchanged until the fix ends, whatever the Committee does.

The Bank itself describes the mechanism plainly: "we set the interest rate, which impacts the cost of getting a mortgage"¹⁴. It has also created rules to limit the riskiest type of mortgage lending, so its influence extends beyond the price of loans to who can borrow how much¹³.

Because new fixed deals are priced on expectations, the relationship between Bank Rate and the averages on offer is looser than many borrowers assume. The dedicated page on how a Bank Rate change affects your mortgage payments works through each mortgage type, and gilt yields and swap costs explains why fixed deals reprice between Committee meetings.

Bank Rate over time: from 0.1% to a 5.25% peak and back to 3.75%

The last five years contain the sharpest rate cycle in recent UK history. The Bank of England interest rate rose from 0.1% in December 2021 to 5.25% in August 2023¹⁸. The Bank raised interest rates 14 consecutive times over that period⁴, and Bank Rate stood at 5.25% at the end of 2023¹⁹. An earlier Financial Stability Report recorded the same climb in two stages: from 0.1% to 5% by mid 2023²⁰.

The way down was slower. The Bank reduced interest rates twice in 2024, in August and November, from 5.25% to 4.75%⁴. In 2025 the Committee lowered rates three times, from 4.75% to 4% by August²¹. By the second quarter of 2026 Bank Rate stood at 3.75%, unchanged at the last four meetings².

Mortgage averages traced this cycle with a lag. The effective interest rate on newly drawn mortgages fell to 4.76% in September 2024 as the first cuts fed through²². In March 2025 the effective rate on new mortgages was 4.5%, down from 4.53%, and the effective rate on the total stock of mortgages, new and existing, fell from 3.87% in February to 3.84% in March²⁴. The gap between those two figures is the lag in action: the stock average includes millions of borrowers still on pre-2022 fixes, so it sits well below the rate on new lending. The full history of past changes is covered in Bank Rate history, and the Committee itself in who sets UK interest rates and when it meets.

Two-year or five-year fix: how the averages compare

Two-year and five-year fixed deals are the two most common choices, and their averages behave differently because they are priced against different expectations. A two-year fix is priced mainly on where rates are expected to be over the next two years; a five-year fix blends in expectations further out, plus a longer commitment from the lender.

The averages in 2026 illustrate the point. The average two-year fixed mortgage rate was 4.92% in August 2026, up 0.82 percentage points on a year earlier¹. Advertised rates also varied by loan-to-value: between January and May 2026 the average advertised two-year fixed rate for a 75% loan-to-value mortgage increased, and for 90% loan-to-value the increase was from 4.3% to 5.3%². Earlier in the cycle, in April 2025, an average two-year 75% loan-to-value mortgage offered a rate of 4.43%, down from 4.53% in March²⁴.

Headline rates are only part of the cost. Average fees on leading fixed-rate deals in January 2026 were:

The average fee on the best two-year fixes for remortgagers had risen by £475 compared with a year earlier²⁵. A deal with a lower rate and a higher fee can cost more in total than a deal with a higher rate and no fee, so the average rate alone does not settle which term is cheaper for a particular borrower. The general guide to mortgages covers how to weigh the two together.

Deposit size changes the rate: averages by loan-to-value

Loan-to-value, or LTV, is the size of the mortgage as a percentage of the property's price, and it is one of the strongest drivers of the rate on offer. The averages make the pattern explicit: in early 2026 the average advertised two-year fixed rate for a 75% LTV mortgage was lower than the 4.3% to 5.3% range recorded for 90% LTV over the same months². A smaller deposit means a bigger loan relative to the property's value, which lenders treat as riskier, and they price that risk into the rate.

The deposit needed for each band is straightforward arithmetic on the purchase price. On a £200,000 home, a 5% deposit is £10,000, a 10% deposit is £20,000 and a 15% deposit is £30,000²⁶. On a £250,000 home a 10% deposit is £25,000, on a £300,000 home it is £30,000, and on a £350,000 home it is £35,000²⁶.

For borrowers without a large deposit, the 2025 Mortgage Guarantee Scheme allows eligible first-time buyers and home movers to buy a home with a 5% deposit²⁷. The trade-off is the one the averages show: higher loan-to-value lending carries higher advertised rates, so a smaller deposit means both a bigger loan and a costlier rate on it. The average mortgage purchase price in England was £298,000 in May 2026⁶, which sets the scale of the deposits involved: 10% of that is close to £30,000.

What higher average rates add to monthly repayments

Average rates translate into real monthly costs, and the official statistics show the aggregate effect. Individuals' mortgage repayments rose to £22.7 billion in April 2026, from £19.8 billion in March, above the six-month average of £19.7 billion²⁸. The average monthly direct debit payment for mortgages was £955 in September 2024, up 8.5% over the year²². Measured across all households, mortgage interest payments increased by 36.1% in the year to March 2024²⁹, the period when the post-2022 rate rises were passing through to borrowers coming off older fixes.

Fees add to the monthly cost too, because many borrowers add the fee to the loan rather than paying it upfront. Adding a typical £1,999 mortgage fee to a £200,000 loan at 3.6% on a two-year fixed rate with 10 years left increases the repayments by almost £20 per month²⁵. On a £300,000 loan at 4% over 25 years on a five-year deal, adding a typical £999 fee increases monthly repayments by just over £5²⁵.

Higher rates also feed into wider measures of living costs. The Office for National Statistics builds its Household Costs Index using interest rates based on average interest rate series published on the Bank of England website³⁰, and mortgage interest is one of the weights that moves that measure for mortgaged households. The page on the Household Costs Index explains how that differs from headline inflation.

Coming off a fixed deal: your options

When a fixed rate ends, the mortgage usually moves to the lender's standard variable rate unless the borrower arranges a new deal. A variable rate can change at any point, typically reflecting a change in the Bank of England's base rate¹³, so sitting on the SVR leaves the payment exposed to both Bank Rate moves and the lender's own decisions. The practical options are:

1. Remortgage to a new fixed deal with the same or a different lender, locking in a rate for a new period. The average fees in the table above show the upfront cost of the leading deals by borrower type²⁵.
2. Take a tracker or variable deal, which typically starts lower but can rise, and moves with Bank Rate.
3. Stay on the standard variable rate, which requires no action but usually costs more than the averages on new fixed lending.
4. Overpay or repay early, where the mortgage allows it, though fixed deals commonly limit overpayments and early repayment can trigger charges.

Timing matters because deals are repriced constantly: the average shelf life of a mortgage product was 21 days in September 2024⁷, so a rate seen today may not be available next month. The government's 2026 mortgage charter states that the UK's mortgage market remains resilient, open and competitive across all major product types and segments, and that significant protections remain in place for anyone worried about their mortgage payments³¹. Borrowers struggling with payments can find routes through the guide to debt, and the wider picture of household borrowing is covered in how much UK households owe.

Where average rate figures are used, including Support for Mortgage Interest

The Bank of England's average mortgage rate is not just a statistic for commentators. It is written into the rules of several schemes that affect households directly.

Support for Mortgage Interest (SMI) helps with interest payments on some benefits claimants' mortgages. A standard interest rate, based on the average mortgage rate published by the Bank of England, is used to calculate the support³². The standard rate was 2.65% in July 2023³². The rate does not follow every wiggle in the market: the standard rate changes when the Bank of England average mortgage rate differs by 0.5 percentage points or more from the rate in payment³². Northern Ireland's regulations use the same trigger, applying it to the standard rate on a reference day¹⁰.

The Household Costs Index uses interest rates based on average interest rate series published on the Bank of England website, so the ONS measure of how living costs affect mortgaged households is built on the same underlying data³⁰.

Financial Ombudsman awards use a related but different benchmark. For complaints referred from 1 January 2026, the default interest rate applied to some compensation awards is simple interest at the average Bank of England base rate plus 1 percentage point³³. The Ombudsman announced the change as a rate that tracks the Bank of England's base (average) rate plus 1%³³.

The common thread is that when a public body needs an objective, market-wide interest rate, it reaches for a Bank of England published series rather than any commercial rate. That is worth knowing, because it explains why a benefit or an award may rise or fall at moments that do not match the lender adverts in the news.

The Bank of England does not lend to households

A recurring scam pattern makes this worth stating plainly. The Bank of England is the UK's central bank and a publicly owned body³⁴. It does not offer savings accounts, investments, cryptoassets or "guaranteed returns", and it does not provide investment advice or endorsements³⁵. The Bank and its staff do not endorse, promote or advertise financial products³⁵.

The Bank will also never contact you about unclaimed estates, refunds, fines or warrants, never ask you to move money "for safety" or to "release funds", never verify your identity by requesting National Insurance numbers or bank statements, and never contact you from personal email addresses³⁵. Anyone offering a mortgage, a savings rate or a guaranteed return in the Bank's name is not genuine. Approaches of this kind can be reported, and the guide to scams and fraud covers where.

For borrowers tracking where rates go next, the useful facts are these: the Government sets the Bank a target of keeping inflation at 2%¹², the Bank was projecting inflation to peak at 3.2% in the fourth quarter of 2026¹⁵, and its next rate decision was set for 17 September 2026¹⁵. How those decisions reach mortgage pricing is covered across Bank Rate, inflation and the UK economy, starting with the 2% inflation target.