What’s Happening With Mortgage Rates? August 2026 Update
Friday August 14, 2026
UK Mortgage Rates: What Buyers Need to Know in 2026
Updated August 2026
If you’re thinking about buying a home, moving property or remortgaging this year, mortgage rates are likely to play a major part in your plans.
Rates have moved considerably over the past few years, and while the market has become more settled, lenders continue to adjust their mortgage products in response to economic conditions, inflation expectations and movements in financial markets.
So, where do mortgage rates currently stand, and what could this mean if you’re planning a move?
What’s happening with UK mortgage rates?
The Bank of England Base Rate has remained at 3.75% since December 2025, but that doesn’t mean mortgage rates have remained unchanged.
Fixed mortgage rates are influenced by a number of factors, including what are known as swap rates – essentially the rates financial institutions use when lending to one another over set periods.
Changes in inflation expectations, economic data and wider global uncertainty can all affect these rates. As a result, mortgage lenders may increase or reduce their fixed-rate products even when the Bank of England Base Rate remains unchanged.
Recent market volatility has pushed some mortgage rates higher, although competition between lenders remains strong.
Current average UK mortgage rates
As of 28 July 2026, average fixed mortgage rates stood at:
| Mortgage type | Average rate | Weekly change | Annual change |
|---|---|---|---|
| 2-year fixed | 5.11% | +0.10% | +0.59% |
| 5-year fixed | 5.13% | +0.11% | +0.61% |
The lowest available rates across the market were approximately:
| Mortgage type | Lowest rate |
|---|---|
| 2-year fixed | 4.42% |
| 5-year fixed | 4.43% |
It’s important to remember that the lowest advertised mortgage rate won’t necessarily be available to every borrower. Your deposit, income, credit history, property value and overall financial circumstances can all affect the mortgage products available to you.
Fees also need to be taken into account when comparing deals, as the mortgage with the lowest headline interest rate isn’t necessarily the cheapest overall.
How much difference does your deposit make?
Your deposit can have a significant impact on the mortgage rate you’re offered.
This is usually expressed as Loan to Value (LTV). For example, if you’re buying a £400,000 property with a £40,000 deposit, you’d require a £360,000 mortgage, giving you an LTV of 90%.
Generally, the larger your deposit and the lower your LTV, the more competitive the mortgage rates available to you.
Current average rates illustrate the difference:
Buyers with a 5% deposit – 95% LTV
- 2-year fixed: approximately 5.70%
- 5-year fixed: approximately 5.71%
Buyers with a 10% deposit – 90% LTV
- 2-year fixed: approximately 5.25%
- 5-year fixed: approximately 5.22%
Buyers with a 15% deposit – 85% LTV
- 2-year fixed: approximately 5.05%
- 5-year fixed: approximately 5.08%
Buyers with a 40% deposit – 60% LTV
- 2-year fixed: approximately 4.65%
- 5-year fixed: approximately 4.70%
This means that buyers who are able to increase their deposit may potentially benefit not only from borrowing less, but also from accessing a lower interest rate.
What does this mean for first-time buyers?
For first-time buyers, mortgage affordability remains one of the biggest considerations when looking for a property.
There are still competitive products available for buyers with smaller deposits.
At the end of July, some of the lowest rates available to first-time buyers included:
- 95% LTV / 5% deposit: 4.97% for a 2-year fix
- 90% LTV / 10% deposit: 4.84% for a 2-year fix
- 85% LTV / 15% deposit: 4.74% for a 2-year fix
While mortgage rates are higher than the ultra-low levels seen several years ago, having a larger choice of properties available and strong competition between mortgage lenders can create opportunities for buyers who are in a position to proceed.
Should you choose a 2-year or 5-year fixed mortgage?
There’s no single answer that will be right for everyone.
A 2-year fixed mortgage gives you the certainty of fixed repayments for two years, while allowing you to review your options again relatively soon. This may appeal to borrowers who believe rates could fall over the next couple of years.
A 5-year fixed mortgage provides greater certainty for longer, which can be attractive if you value knowing exactly what your monthly repayments will be.
However, fixing for longer may mean being tied into the mortgage for a longer period, potentially with Early Repayment Charges if you want to leave the deal early.
The right option will depend on your circumstances, future plans and attitude towards changes in interest rates.
How do mortgage rates affect your buying power?
Even relatively small changes in mortgage rates can make a noticeable difference to monthly repayments.
For buyers, this means it’s worth understanding your likely mortgage position before beginning or progressing too far with a property search.
Knowing approximately how much you can borrow and what your repayments are likely to be can help you establish a realistic budget and put you in a stronger position when you find the right property.
If mortgage rates improve while you’re searching, your affordability may also change, potentially opening up properties that previously sat just outside your budget.
Are mortgage rates likely to fall?
Predicting the direction of mortgage rates with certainty isn’t possible.
The Bank of England’s future decisions will continue to be influenced by inflation, economic growth and wider economic conditions. Fixed mortgage rates can also move independently of the Base Rate as financial markets anticipate what may happen next.
Lower-than-expected inflation can put downward pressure on market expectations and potentially encourage lenders to reduce rates. Equally, economic or geopolitical uncertainty can push borrowing costs higher.
For buyers, the important point is not necessarily trying to perfectly time the market, but understanding what is affordable based on the rates available to you now.
Thinking of moving in Potters Bar or the surrounding areas?
Mortgage rates are only one part of deciding whether now is the right time to move.
Your current property’s value, the amount of equity you have, the availability of suitable homes and your personal circumstances all play an important role.
If you’re considering selling your home in Potters Bar or the surrounding areas, Auckland Estates can provide an up-to-date assessment of your property’s likely market value and discuss the current level of buyer demand in your area.
Understanding what your existing home could realistically achieve is often the best starting point when working out your onward buying budget.
Contact Auckland Estates on 01707 664 400 to arrange a free, no-obligation property valuation or to discuss your moving plans with our team.
Important information
Mortgage rates and products can change frequently and the figures above are intended as a general market guide only. The mortgage rate available to you will depend on your individual circumstances and lender criteria.
Auckland Estates is an estate agency and the information contained in this article does not constitute mortgage or financial advice. You should seek advice from a suitably qualified and regulated mortgage adviser before making financial decisions.
Your home may be repossessed if you do not keep up repayments on your mortgage.