Bank of England raises base rate to 4%. What does it mean for your mortgage?
Tags: Residential mortgages
Quick Summary
The Bank of England raised its base rate from 3.75% to 4% on 5 November 2026, the first increase in more than three years. The Monetary Policy Committee voted 8–1 for the quarter-point rise as higher energy prices pushed UK inflation to 3.5% in September. The Bank expects inflation to reach around 5% by mid-2027.
Homeowners with a tracker mortgage linked to the base rate will typically see their monthly payments rise. Borrowers on a standard variable rate could also pay more if their lender increases its rate. Existing fixed-rate mortgage payments stay the same until the deal ends, although lenders can reprice new fixed deals. If your fix is ending soon, Trinity Financial can help you compare your lender’s switch options with remortgage deals.
The Bank of England raised its base rate from 3.75% to 4% on 5 November 2026, the first increase in more than three years. If you have a mortgage that tracks Bank Rate, your repayments are set to rise.
If you’re on a fixed rate, your monthly payment stays the same until your deal ends. If that date is approaching, now is a good time to compare what your lender will offer with deals elsewhere.
Why did the Bank of England raise interest rates?
UK inflation reached 3.5% in September, above the Bank’s 2% target. The conflict in the Middle East has disrupted energy supplies and pushed up fuel and utility costs. The Bank raised rates to reduce the risk that higher energy costs feed through to other prices and keep inflation higher for longer.
Governor Andrew Bailey indicated that a further rise was likely if the Iran conflict continued, while cautioning against assuming a long run of increases. The next Bank Rate decision is due on 17 December 2026.
He said: "There is now enough inflationary pressure in the pipeline caused by the rise in energy prices that an increase in Bank Rate is warranted. Today’s increase shouldn’t be seen as the first in an inevitable long sequence of hikes. But, unless the conflict in the Middle East is resolved, neither does it seem likely to be the last increase. The MPC will judge the outlook at each meeting, responding as necessary to bring inflation sustainably back to our 2% target."
Will my mortgage payments go up?
| Mortgage type | What the rise to 4% means for you |
|---|---|
| Bank Rate tracker | If your deal tracks the Bank of England, your mortgage rate will rise by 0.25 percentage points. Check your lender’s notice for the new repayment and the date it takes effect. |
| Fixed rate | Your rate stays the same until the fix ends. If you’re nearing that date, check what you’ll pay if you move onto your lender’s standard variable rate. |
| Standard variable rate (SVR) | Your lender decides whether to raise its rate, by how much and when. Many lender increase their SVR on the back of a base rate change. |
| Buying or remortgaging | New fixed rates can move ahead of a Bank Rate decision because lenders price deals partly on funding costs and expectations for future rates. A 0.25 percentage point rise in Bank Rate does not automatically mean new fixes will rise by the same amount. Fixed rates have been getting cheaper over the last week. |
Source: Trinity Financial
What does the rise cost in pounds? On a £250,000 repayment tracker with 25 years remaining, a rise from 4.25% to 4.50% would take the illustrative monthly payment from about £1,354 to £1,390, an increase of around £35 a month based on the unrounded figures. The example excludes fees. Your lender will confirm your actual payment.
Three things to do after the base rate rise
- Check your mortgage rate and deal end date. If you’re on a tracker, look for your lender’s new repayment figure and update your budget. If you’re on a fix, check when it ends and the rate you’ll move onto if you take no action.
- Compare your lender’s offer with a remortgage. A switch with your existing lender is known as a product transfer. Trinity Financial's brokers can help you compare deals from other lenders over the same period, taking into account product fees, any cashback and early repayment charges. A lower headline rate can cost more once you include fees.
- Review your options before your deal ends. If your fix ends within the next six months, it may be possible to secure a mortgage with a new lender. Many banks and building societies allow product transfers up to four months before the fixed or tracker rate finishes.
Speak to a Trinity Financial adviser today
The mortgage market moves fast — and the right advice can make a significant difference to the rate and deal you secure. Get in touch with our team to discuss your options.
Call Trinity Financial on 020 7016 0790 to secure a fixed or tracker rate mortgage, book a consultation, or use our appointment calendar
The information contained within was correct at the time of publication but is subject to change. It is for general information purposes and is not advice.
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