Bank of England raises rates to 4.00%: who will see higher mortgage payments, and when

The Bank of England's Monetary Policy Committee (MPC) announced on 5 November 2026 that it was raising Bank Rate by 0.25 percentage points to 4.0%. According to the House of Commons Library, it is the first increase since August 2023. British media dubbed it "Christmas Mortgage Misery" because it came less than two months before Christmas.

Why rates went up

In the MPC vote, eight members backed a rise of 0.25 percentage points and one voted for a rise of 0.5 percentage points. The committee pointed to higher global energy prices and inflationary pressure still building in the pipeline. CPI inflation was 3.5% in September 2026. Bank of England staff forecast it to rise to around 5% in the second quarter of 2027, against a target of 2%.

Rates had previously been cut gradually from August 2024 to December 2025, when they stood at 3.75%.

How the rise will affect mortgage payments

How quickly the change reaches borrowers depends on the type of deal. According to Polish Express, which cites UK Finance data among other sources:

• Tracker mortgages (variable rate linked to Bank Rate): payments change almost immediately. On an average mortgage they are expected to rise by about £30–£45 a month. This affects more than 500,000 people.
• Standard Variable Rate (SVR): each lender sets its own rate. The change usually comes within a few days to a month, and lenders generally pass on the whole increase, although they are not obliged to.
• Fixed rate: these make up about 87% of active mortgages. Payments will not change until the fixed period ends. Around 700,000 such deals expire in the second half of 2026, and another 2.3 million will expire in 2027.

What this means for you

The rules work the same way for all borrowers, whatever their nationality. If you have a mortgage in the UK, check your agreement to see what type of rate you have and when your fixed period ends.

If a fixed deal ends and the customer does nothing, the mortgage usually moves onto the same lender's SVR. It is therefore worth comparing new offers well in advance, including through your mortgage adviser. Polish Express notes that new offers are likely to be more expensive than previous ones, as the market adjusts to higher rates.

People who rent are not directly affected by a change in mortgage payments. However, none of the sources we used describes the effect of the rise on rents.