UK Interest Rates 2026 | Residential & Commercial Mortgage Rates

UK Interest Rates

Current Bank of England base rate, historical trends, and mortgage rate comparisons to help you understand today's borrowing costs.

Bank of England Base Rate

3.75%

-0.25%

Last changed: 1 December 2025

10-Year High

5.25%

Aug 2023

10-Year Low

0.10%

Mar 2020

1-Year Change

-1.00%

10-Year Base Rate History

Bank of England base rate changes since 2016

COVID Low (0.10%)

2023 Peak (5.25%)

Current (3.75%)

Rate Outlook

Next 6 months

Inflation cooling may allow further gradual cuts.

2026-2027

Most economists expect base rate to settle around 3.0-3.5%.

Forecasts are based on market consensus and may change. Always consult a mortgage advisor for personalised advice.

Current Mortgage Rates

Average rates by mortgage type

2-Year Fixed6.59%

Lock in your rate for 2 years. Popular for flexibility and lower initial rates.

Range:5.94%to7.24%

5-Year Fixed4.34%

Lock in your rate for 5 years. Offers longer-term stability and often lower rates.

Range:3.69%to4.99%

10-Year Fixed4.54%

Maximum rate security for a decade. Best for long-term planners.

Range:3.89%to5.19%

Tracker5.24%

Follows BoE base rate plus a margin. Rate goes up or down with base rate.

Range:4.59%to5.89%

Standard Variable Rate (SVR)6.33%

Lender's default rate after fixed period ends. Usually the most expensive option.

Range:5.33%to7.33%

Discount Variable3.93%

A discount off the lender's SVR. Rate varies but stays below SVR.

Range:3.23%to4.63%

Test Different Rates

See how rate changes affect your monthly payment

Loan Amount

Interest Rate: 5.50%

2%10%

Monthly Payment£1,351/mo

Open Full Calculator →

Residential vs Commercial Mortgage Rates

The rates shown above are for residential mortgages. Commercial mortgage rates differ significantly.

Residential Mortgages

2-Year Fixed5.94% - 7.24%

5-Year Fixed3.69% - 4.99%

Tracker4.59% - 5.89%

For owner-occupied homes. Typically lower rates, longer terms (up to 40 years), and lower deposits (from 5%).

Commercial Mortgages

Fixed Rate5.50% - 8.50%

Variable Rate5.00% - 7.50%

Bridging Finance0.55% - 1.5%/mo

For offices, retail, warehouses, and mixed-use. Higher rates, shorter terms (typically 15-25 years), and 25-40% deposit required.

Key Differences

Deposit: Residential from 5%, commercial typically 25-40%
Terms: Residential up to 40 years, commercial usually 15-25 years
Rates: Commercial rates are 1-3% higher than equivalent residential rates
Assessment: Commercial lenders focus on business income and rental yield, not just personal salary

Understanding UK Interest Rates

What is the Base Rate?

The Bank of England base rate is the interest rate the BoE charges to lend money to financial institutions. It's the foundation for most UK interest rates, including mortgages, savings accounts, and loans.

How Does It Affect Mortgages?

When the base rate rises, mortgage rates typically follow. Tracker mortgages change immediately, while fixed rates are influenced by market expectations of future rate movements.

Fixed vs Variable Rates

Fixed rates lock in your payment for a set period (usually 2-5 years), protecting you from rate rises. Variable rates can change, offering potential savings if rates fall but risk if they rise.

When to Consider Remortgaging

If your fixed rate is ending or you're on a high SVR, comparing current deals could save you money. Use our calculator to see potential savings at different rates.

Data Sources

Base rate data sourced from the Bank of England. Residential mortgage rate averages are indicative figures based on market data. Commercial rates are typical ranges from UK lenders. All rates shown are for guidance only — actual rates depend on individual circumstances, LTV, and lender criteria. Last updated: January 2026.