The average 5-year fixed mortgage rate in the UK was approximately 4.98% as of September 2026 — above the 2021 annual-average low of 1.58%, and now above the 30-year average of 4.72%. For borrowers who remortgaged at pandemic-era lows and now face renewal, the payment increase is substantial: on a £250,000 loan, monthly payments have risen by roughly £450 compared to 2021. The data below covers both the 5-year and 2-year fixed rate from 1995 to 2026, sourced from Bank of England monetary financial institutions (MFI) statistics; the 2026 current-rate figures are the Bank of England monthly figures for September 2026, and annual figures are averages of the monthly rates.
UK Mortgage Rate Summary (1995–2026)
- The 30-year average 5-year fixed mortgage rate (75% LTV) is 4.72%
- The 30-year average 2-year fixed mortgage rate (75% LTV) is 4.28%
- Lowest 5-year fixed rate (annual average): 1.58% (2021)
- Highest 5-year fixed rate (annual average): 8.90% (1995)
- Lowest 2-year fixed rate (annual average): 1.45% (2021)
- Highest 2-year fixed rate (annual average): 8.07% (1995)
- Current 5-year fixed rate (as of September 2026): 4.98%
- Current 2-year fixed rate (as of September 2026): 5.13%
5-Year vs 2-Year Fixed Mortgage Rate — 1995 to 2026
The two most popular fixed-rate terms in the UK are the 5-year fix and the 2-year fix. Historically, 2-year rates were typically slightly lower than 5-year rates. Since late 2022, however, 2-year rates have mostly sat above 5-year rates — by roughly 0.4 to 0.7 percentage points through 2023, a gap that narrowed to almost nothing from May 2025 to March 2026 before reopening from April 2026. In September 2026, for example, the average 5-year rate (4.98%) was below the average 2-year rate (5.13%).
The chart illustrates three distinct eras in UK mortgage rates:
- 1995–2007 (The high-rate normalisation era): Rates gradually fell from nearly 9% in 1995 to around 5–6% by the mid-2000s.
- 2009–2021 (The ultra-low rate era): Following the financial crisis, the BoE cut its base rate to 0.1% in March 2020. Mortgage rates tracked this downward trend, reaching all-time lows below 2% by 2021.
- 2022–2026 (The rate shock and normalisation): The Bank of England raised its base rate from 0.1% to 5.25% between December 2021 and August 2023 to combat inflation. Mortgage rates surged, peaking in 2023, and have since partially retraced as the BoE began cutting rates again.
5-Year Fixed Mortgage Rate History (1995–2026)
- 30-year average (1995–2026): 4.72%
- Lowest annual average rate: 1.58% (2021)
- Highest annual average rate: 8.90% (1995)
- Current rate (September 2026): 4.98%
The 5-year fixed rate is the most popular mortgage product in the UK. Its appeal lies in payment certainty: borrowers lock their rate for five years, shielding themselves from short-term market movements. The 2021 average of 1.58% was extraordinary by historical standards — roughly 3 percentage points below the long-run average — in a year when Bank Rate sat at 0.1% until mid-December. Borrowers who secured a 5-year fix in 2020 or 2021 have been coming off those rates as the fixes end in 2025 and 2026, and 5-year rates are now substantially higher.
2-Year Fixed Mortgage Rate History (1995–2026)
- 30-year average (1995–2026): 4.28%
- Lowest annual average rate: 1.45% (2021)
- Highest annual average rate: 8.07% (1995)
- Current rate (September 2026): 5.13%
The 2-year fixed rate averaged 5.31% in 2023 — its highest annual average since 2008 (its highest month was July 2023, at 6.22%). At the same time the 5-year fixed averaged 4.81%, creating an unusual situation where borrowers paid more to fix for a shorter period. For borrowers in 2023 who chose a 2-year fix hoping to remortgage onto lower rates in 2025, that strategy has partially paid off — 2-year rates have fallen from a 5.31% average in 2023 to 5.13% in September 2026 (after averaging 4.29% in 2025).
How the Bank of England Base Rate Drives Mortgage Rates
UK mortgage rates do not directly track the Bank of England base rate — but it is the single most important input. The BoE base rate influences lender pricing through several channels:
| Channel | How It Works |
|---|---|
| Lender funding costs | Banks borrow at rates linked to the BoE base rate; higher base rate = higher wholesale funding costs |
| SONIA swap rates | Fixed mortgage rates are priced off SONIA (Sterling Overnight Index Average) swap rates, which embed market expectations for future BoE moves |
| Savings competition | When the BoE raises rates, banks must pay more on savings accounts, pushing up the cost of all lending |
| Inflation expectations | If inflation expectations fall, rate cuts become possible and mortgage rates decline ahead of actual BoE moves |
The BoE base rate held at 0.1% from March 2020 until December 2021, when the Bank began raising it — reaching 5.25% by August 2023, a 5.15 percentage point increase in about 20 months. During the same period, the 5-year fixed mortgage rate rose from approximately 1.6% to about 5.7% at its July 2023 peak. Fixed rates actually rose more steeply than the base rate because SONIA swap markets priced in an even higher rate path than ultimately materialised. The BoE began cutting its base rate from August 2024, reducing it in six 0.25-point steps to 3.75% by December 2025. As of September 2026, the base rate has been held at 3.75% at every subsequent MPC meeting (February, March, April, June, July, and September 2026), with the Committee split at several of them: four members voted to cut in February, one voted to raise in April, and three voted to raise in September.
What Your Rate Means for Monthly Payments: A Worked Example
Understanding the pound impact of rate changes is more useful than watching percentages in isolation. On a £250,000 mortgage over 25 years, here is what different historical rates mean for monthly payments:
| Rate | Era | Monthly Payment | Total Interest Paid |
|---|---|---|---|
| 1.58% | 2021 (historic low) | £1,009 | £52,800 |
| 2.06% | 2017 average | £1,067 | £70,100 |
| 3.38% | 2022 | £1,236 | £120,800 |
| 4.98% | 2026 current (September) | £1,459 | £187,700 |
| 4.72% | 30-year average | £1,421 | £176,300 |
| 5.88% | 2008 peak | £1,592 | £227,600 |
| 8.90% | 1995 | £2,081 | £374,300 |
The payment shock from 2021 to 2026: A borrower who took a 5-year fix at 1.58% in 2021 and is now remortgaging at 4.98% faces a £450/month increase — £5,400 per year more on the same loan balance. On a £400,000 mortgage the increase is approximately £719/month.
On the positive side, current rates remain well below the levels of the mid-1990s and broadly in line with much of the 2000s. The 8.90% rate of 1995 would produce a monthly payment of £2,081 — about £622/month more than the 4.98% payment. Use the mortgage affordability calculator to model your specific property price and deposit.
Average UK Mortgage Rates by Year
These figures represent average annual rates for 5-year and 2-year fixed mortgages at 75% LTV based on Bank of England MFI statistics. The 2026 figures in the table are the September 2026 monthly rates, not a full-year average; the 2026 point on each chart is the January to September 2026 average.
Source: Bank of England MFI Statistics — fixed rate mortgages to households at 75% LTV. Annual figures are averages of monthly observations. The 2026 figure marked with * is a single-month snapshot (September 2026, Bank of England data) rather than a full-year average, since 2026 is not yet complete.
What Determines Your Mortgage Rate
The Bank of England and SONIA swap markets determine where average rates sit — but your personal financial profile determines which rate you qualify for within that range.
| Factor | Impact on Your Rate |
|---|---|
| Loan-to-value (LTV) | Biggest factor — lower LTV gets lower rates; in August 2026 a 95% LTV 5-year fix averaged about 0.6 points above a 75% LTV one |
| Credit score | A poor credit history can mean a higher rate or fewer lenders willing to offer |
| Fixed term | 2-year fixes currently priced higher than 5-year in the UK |
| Property type | New builds, ex-local authority flats, and HMOs may attract higher rates |
| Arrangement fees | Low-rate deals often carry an arrangement fee; compare total cost of credit not just headline rate |
| Lender type | High-street banks, building societies, and specialist lenders price differently |
The LTV effect is substantial. At 75% LTV, the 5-year fixed rate was approximately 4.98% in September 2026 (4.78% in August 2026). At 90% LTV, a 2-year fix averaged about 0.2 points more in August 2026. At 95% LTV, add roughly 0.6 points on both 2-year and 5-year fixes (August 2026). For first-time buyers with a smaller deposit, this means significantly higher monthly payments than the headline averages shown above.
2-Year or 5-Year Fix in 2026?
With 2-year rates currently above 5-year rates (an inverted curve), the conventional wisdom of “fix short when rates are high” is less clear-cut in 2026.
| Scenario | Better Choice | Reason |
|---|---|---|
| You expect rates to fall significantly by 2028 | 2-year fix | Remortgage onto lower rates in 2 years |
| You value payment certainty | 5-year fix | Lower rate today, no renewal stress for 5 years |
| You may move or sell within 3 years | 2-year fix | Avoids early repayment charges (ERCs) on a 5-year product |
| Rates fall less than markets expect | 5-year fix | Already locked at a lower rate than 2-year |
As of September 2026 the BoE has held Bank Rate at 3.75% since December 2025, and it has said that the longer higher energy prices persist, the more likely it is that it will need to raise Bank Rate. In this environment the 5-year fix’s longer certainty remains a popular choice for many borrowers, even though its headline rate was only about 0.15 points below the 2-year fix in September 2026. See UK mortgage types explained for a full comparison of all fixed and variable options, and use the buy-to-let mortgage calculator if you are considering a rental investment.
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