Bank of England Raises Rates to 4%: What It Means for London Mortgages

What the Bank of England decided

On 5 November 2026 the Bank of England's Monetary Policy Committee voted 8–1 to raise Bank Rate by 0.25 percentage points to 4%. It is the first increase since August 2023. One member, Catherine Mann, voted for a larger rise of 0.5 points.

The Bank pointed to energy prices, which have stayed high and volatile because of conflict in the Middle East, and to inflation that has moved back up: CPI was 3.5% in September, well above the 2% target. The Bank has warned that inflation could approach 5% by mid-2027. The next decision is due on 17 December 2026.

Who is affected straight away?

The impact depends entirely on the type of mortgage you hold.

• <strong>Tracker and variable-rate borrowers:</strong> payments will rise in line with the 0.25% increase, usually within weeks.
• <strong>Standard Variable Rate (SVR) borrowers:</strong> most lenders pass base rate changes on, so expect an increase to an already expensive rate.
• <strong>Fixed-rate borrowers:</strong> your payments do not change until your deal ends, but the rate you can get at that point may be higher than you hoped.

Fixed rates had already moved

Fixed mortgage pricing is driven mainly by swap rates, which reflect where markets expect rates to go, rather than by Bank Rate itself. Much of this rise was therefore anticipated. Lenders had been repricing upwards for weeks, and average two-year fixed rates were close to 6% by early November according to Moneyfacts.

That matters for timing. Waiting for a rate to "settle" is a gamble when markets are pricing in the possibility of further rises. Rates can change within days, and the best deals are often withdrawn without much notice.

What to do if your deal is ending

Most lenders let you secure a new rate up to six months before your current deal expires, with no obligation to take it if something better appears. If your fixed rate ends in the next six months, that is a useful safety net.

• Speak to a broker now rather than at the last minute. We can compare deals from 90+ lenders, not just your existing one.
• Secure a rate early, then have your adviser keep checking for improvements before completion.
• Consider how long you want certainty: a five-year fix protects you from further rises, while a shorter fix suits you if you expect to move or want flexibility.
• Check for early repayment charges before switching to a new lender mid-deal.

Buyers, first-time buyers and landlords

For buyers, higher rates reduce how much lenders will let you borrow, because affordability calculations are stress-tested against rates. Get an updated agreement in principle based on today's pricing before you make an offer, and be realistic about budgets in London's higher price brackets.

For landlords, buy-to-let lenders test rental income against a stress rate, so higher pricing can reduce borrowing capacity on thinly covered properties. Limited company and portfolio landlords should review upcoming expiry dates early and test whether rents still cover payments comfortably.