At the start of this year, millions of UK homeowners had good reason to feel cautiously optimistic. The Bank of England had been steadily cutting interest rates through 2025, fixed mortgage rates were edging downward, and most forecasters were pencilling in at least two more base rate cuts in 2026. For anyone coming off a cheap deal taken out in 2021 or 2022, the outlook was improving — not great, but improving.
Then March happened.
The conflict in the Middle East sent oil and gas prices surging, inflation expectations jumped, swap rates spiked sharply, and mortgage lenders started repricing their products with unusual speed. HSBC, NatWest, Nationwide, and Coventry Building Society all raised fixed rates within days of each other. The average two-year fixed rate climbed from around 4.83% at the start of March to 5.84% by early April — a jump of more than a full percentage point in under five weeks. For someone remortgaging a £200,000 loan, that’s a meaningful difference in monthly payments.
Since then, rates have started to come back down. As of early June 2026, the average two-year fixed rate sits at around 5.68%, and the average five-year fix at around 5.63%. The best rates on the market — for borrowers with large deposits and clean credit — are notably lower, with Halifax offering two-year deals from around 4.37% and HSBC offering five-year fixed rates from around 4.40% at 60% LTV.
But the question most people are asking right now isn’t “what are rates today?” It’s: what happens next — and what should I actually do?
How We Got Here: Mortgage Rates The Story So Far
Understanding where mortgage rates are in mid-2026 requires a quick recap of the last 18 months, because the context matters more than usual.
From August 2023, the Bank of England held its base rate at 5.25% through most of 2024. Then, as inflation gradually eased, it began cutting: four reductions through 2025 brought the base rate down from 4.75% to 3.75% by December 2025. Mortgage rates fell in parallel. By early February 2026, the best available fixed deals were briefly touching close to 4% — rates that looked increasingly affordable compared to the peaks of 2022 and 2023.
What nobody had accounted for was what happened in late February and early March 2026. The escalation of conflict in the Middle East triggered a sharp spike in global oil and gas prices, feeding directly into UK inflation expectations. Swap rates — the financial instruments that underpin the pricing of fixed-rate mortgages — jumped by around 30 basis points within a week. Lenders had no real choice but to reprice.
By mid-May, the average two-year fixed mortgage rate had reached 5.81%, its highest since late 2023. The mortgage product count briefly fell to its lowest level since March as lenders pulled deals and repriced. It was, by any measure, a sharp and unwelcome reversal.
The more recent picture is more encouraging. Inflation fell from 3.3% in March to 2.8% in April, helped partly by a reduction in the household energy price cap. Major lenders including NatWest, Barclays, TSB, Halifax, and Santander have since cut fixed rates. The average two-year rate fell by 0.10% between May and early June — its biggest monthly drop in over a year. Product choice has recovered above 7,000 deals for the first time since March. The direction of travel, at least for now, is downward.
Where Rates Actually Stand Right Now (June 2026)
Rates vary significantly depending on your loan-to-value (LTV) ratio, the size of your deposit, and which lender you approach. The figures below are average and best-buy rates as of early June 2026:
Average market rates (Moneyfacts data, early June 2026):
- Average two-year fixed rate: ~5.68%
- Average five-year fixed rate: ~5.63%
- Average standard variable rate (SVR): ~7.13–7.15%
Best available rates (at 60% LTV, with fees):
- Best two-year fixed rate: ~4.37% (Halifax, £1,099 fee)
- Best five-year fixed rate: ~4.40% (HSBC, £1,016 fee)
- Best three-year fixed rate: ~4.53% (Halifax, £1,099 fee)
A few things jump out from these numbers. First, the gap between average rates and best-buy rates is substantial — often 1–1.3 percentage points. This is why shopping around, or using a whole-of-market mortgage broker, genuinely matters. The average rate is what you get if you take whatever your existing lender offers without looking elsewhere. The best rate is what a well-prepared borrower with a good deposit can access.
Second, notice how close the two-year and five-year fixed rates are to each other right now. Historically, you’d expect to pay meaningfully more for a two-year fix than a five-year one, because shorter-term rates reflect near-term expectations of higher rates. Right now, the gap between average two-year and five-year rates is around 0.05–0.10%. That’s unusually narrow — and it has significant implications for the fix-now-or-wait question, which we’ll come to shortly.
Third: if you’re currently sitting on your lender’s standard variable rate, those average and best-buy figures above should prompt urgent action. The average SVR is running at around 7.13% right now. The best five-year fix is 4.40%. On a £200,000 mortgage over 25 years, that difference in rate equates to roughly £300 a month in extra payments. There is almost no scenario in which staying on an SVR makes financial sense.
The Rate Outlook: What the Forecasters Are Saying
Here’s the honest answer: nobody knows what mortgage rates will do next — and anyone who tells you otherwise with confidence is either guessing or selling something.
The next Bank of England decision is on 18 June 2026. Markets widely expect rates to be held at 3.75%, but the picture beyond that is genuinely uncertain. Oxford Economics thinks the Bank will hold at 3.75% for the rest of 2026 and into 2027. Pantheon Macroeconomics expects two hikes this year followed by cuts in 2027. Goldman Sachs sees rates unchanged for now but says a couple of hikes are possible over the summer if energy price pressures build. The Bank of England’s own projections, published alongside the April decision, flagged a scenario in which inflation hits 6.2% by early 2027 — which would almost certainly trigger rate rises.
The range of plausible outcomes is wide: base rate anywhere from 3.5% to over 4.25% by year end, depending on whether the Middle East situation stabilises or escalates, and how quickly inflation responds.
What this means for fixed mortgage rates is similarly uncertain. If the base rate rises, swap rates will likely climb again, and fixed mortgage rates will follow. If inflation eases and the Bank resumes cutting, the downward trend in mortgage rates could continue. The rate that looks decent today might look better or worse in three months.
The one thing that is clear from recent months: the mortgage market can move fast. Rates that were near 4% in February hit 5.84% in April. If you’re waiting for the “perfect” moment to lock in, that moment has a way of vanishing before you reach it.
Should You Fix Now — or Wait?
This is the question that most readers came here to answer, so let’s work through it honestly.
If your mortgage deal is ending in the next six months: act now
This is the clearest case. If your fixed rate expires in the next four to six months and you haven’t started looking at your options, start today. Here’s why.
Most lenders will let you lock in a new rate up to six months before your existing deal ends. If rates fall further between now and your completion date, most brokers offer a rate-check service — you lock in now and if a better deal comes up before your switch date, you can review whether to move to it. This gives you protection against rates rising without fully giving up the ability to benefit if they fall.
If you do nothing and roll onto your lender’s SVR — which is what happens automatically when your fix expires — you could find yourself paying 7%+ when competitive deals are available at 4.4–5.7%. That’s an expensive form of procrastination.
Around 1.8 million UK fixed-rate mortgage deals are due to expire in 2026, many taken out in 2021 or 2022 at rates between 1.5% and 2.5%. If yours is one of them, the payment increase you’re facing is significant regardless of what you do — but staying on the SVR makes it much worse than it needs to be.
If you’re already on your SVR: review your options urgently
The maths here is simple and stark. Even in today’s market, you can access fixed rates well below 7%. Remortgaging now means paying more than two years ago, yes — but it almost certainly means paying less than you are now.
Two years or five years?
This is where it gets interesting in 2026, because the usual logic is less clear than normal.
In a typical market, you’d fix for two years if you thought rates would fall — so you could remortgage sooner onto a better deal. You’d fix for five years if you wanted certainty and expected rates to stay elevated or rise.
Right now, the gap between two-year and five-year fixed rates is unusually narrow — sometimes just 0.05–0.10% at average rates, and similarly close at the best-buy level. Five years of rate certainty is essentially available for the same price as two years of it. That makes the five-year fix relatively attractive as a pure value proposition.
The argument for a five-year fix: you get payment certainty for five years, you’re not exposed to whatever the next rate cycle brings, and you’re protected if the Middle East situation worsens and rates spike again.
The argument for a two-year fix: if rates do come down as the Bank of England eventually resumes cutting — whether later in 2026 or into 2027 — you get to remortgage onto a better deal sooner. Two years also gives you flexibility if your circumstances might change: a house move, a significant change in income, overpaying your mortgage more aggressively.
There is no universally right answer. But the conventional wisdom that “if in doubt, take the five-year fix for stability” carries more weight than usual in 2026 given how little it currently costs in rate terms to buy that stability.
What about tracker mortgages?
Tracker mortgages follow the Bank of England base rate directly, usually at a set margin above it. If you think rates are heading down — and you have the financial cushion to absorb potential increases if you’re wrong — a tracker can be worth considering. They typically carry no early repayment charges, which gives you flexibility to switch to a fix if rates rise or fall significantly.
The risk is obvious: if the Bank raises rates, your monthly payments go up immediately. Given the genuine possibility of rate hikes in 2026, trackers carry real uncertainty. They’re not the right choice for anyone whose budget is tight.
The Practical Steps: What to Do Now
Whatever your situation, here’s what good preparation looks like in the current market.
Check when your current deal ends. Look at your mortgage paperwork, log into your lender’s app, or call them. You need to know the exact expiry date and whether any early repayment charges apply for exiting early.
Get a whole-of-market mortgage broker involved. Lenders don’t all offer their best rates directly. A whole-of-market broker — there are fee-free options such as L&C Mortgages and Habito — can search hundreds of products and often access deals not available on the open market. Given how rapidly rates are currently changing, their real-time knowledge of what’s available matters.
Don’t just look at the headline rate — factor in fees. A lower rate with a £1,099 arrangement fee might cost you more over a two-year term than a slightly higher rate with no fee, depending on your loan size. Do the total cost calculation, not just the rate comparison.
Lock in a rate and keep it under review. As several mortgage advisers have noted publicly in recent months: lock in a deal you’re comfortable with, then watch the market. If something significantly better appears before your completion date, you can reassess. The downside of locking early is minimal; the downside of doing nothing and getting caught by a rate spike is very real.
If your deal ends more than six months away, keep watching. The six-month window is roughly when most lenders will let you secure a new rate. Mark the date in your calendar and start researching properly around three months before that point.
The Number That Should Scare Every SVR Borrower
Let’s be direct. The Bank of England’s Financial Stability Committee estimated in April 2026 that 5.2 million UK households now face mortgage cost increases by 2028 as a result of the Middle East conflict — 1.3 million more than previously forecast. That’s a lot of people facing a meaningful squeeze on their monthly budgets.
The borrowers who will feel it least are those who take action early: shop around, use a broker, lock in a competitive rate, and stop paying whatever their lender put them on by default.
The borrowers who will feel it most are those who drift onto the SVR, assume rates will drop before they need to do anything, and wake up six months later to find that today’s rates were the good ones.
The Bottom Line
UK mortgage rates are not where anyone hoped they’d be at this point in 2026. The spike driven by the Middle East conflict was sharp and largely unexpected, and although rates have been pulling back since May, they remain significantly above the lows of early February.
But dwelling on where rates were doesn’t change where they are. The constructive questions are: what rate can I actually access right now, is it better than my current deal or my SVR, what happens if I lock in now versus waiting, and how much uncertainty am I comfortable living with?
For most homeowners with a deal ending in the next six months, the answer to “should I fix now?” is straightforwardly yes — you should at least be actively comparing and locking something in, even if you keep watching for better options before completion.
For those with more time, the honest answer is to watch the market carefully, get a broker involved early, and resist the temptation to wait for a perfect rate that may or may not arrive. The direction of rates from here is genuinely uncertain. What isn’t uncertain is the cost of ending up on the SVR through inaction.
Disclaimer: This article is for informational purposes only and does not constitute mortgage or financial advice. Mortgage rates change frequently. Your home may be repossessed if you do not keep up repayments on your mortgage. Always seek independent mortgage advice from a qualified, regulated adviser before making any decision about your mortgage.