Major UK lenders have begun a second wave of mortgage rate increases ahead of this week’s Bank of England (BoE) base rate (BBR) decision, according to new research.

NatWest, Santander, HSBC, Lloyds Bank and TSB are all raising selected fixed rates for the second time since the start of September, Moneyfacts has found.

The latest increases follow higher swap rates, which have risen above 4.70%. The average new mortgage rate has increased to 5.68%, from 5.59% at the start of August and 4.90% at the beginning of March.

Since March, the average two-year fixed mortgage rate has risen by 0.89%, from 4.84% to 5.73%. On a £250,000 repayment mortgage over 25 years, this would add around £131 to monthly repayments, or £1,572 a year. A further 0.25% increase would add around £38 a month.

Rachel Springall, finance expert at Moneyfacts, said: "A second wave of mortgage rate hikes has begun from the major banks in reaction to growing concerns surrounding inflationary pressures. It is highly likely other lenders will follow suit to adjust rates, and with some deals withdrawn from the market, it is expected any returning deals could well be priced higher."

Springall said the average two-year fixed rate was now at its highest level since June, while five-year rates had returned to levels last seen in April. She added that economists expected the central bank to hold rates this week, followed by a 0.25% increase in November, although further rises are being forecast into 2027.

Remortgage activity remains strong as borrowers seek to secure deals before rates rise further. FCA data showed 381,364 mortgages were locked into new deals up to six months before maturity in Q2 2026, while almost 900,000 mortgages were locked into deals across Q1 and Q2 combined.

The BoE has estimated that around 750,000 households with fixed-rate mortgages expiring in 2026 are currently paying rates below 3%, exposing the potential payment shock facing borrowers as they refinance.

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