What happened

The Bank of England held Bank Rate at 3.75% at its decision on 17 September. Its next decision is due on 5 November.

Holding the rate has not stopped fixed mortgage rates rising. Lenders price fixed deals on what the markets expect rates to do over the next two or five years, not on today’s Bank Rate, and those expectations have moved up. Many lenders have repriced their fixed deals in recent weeks, and average mortgage rates are at their highest for around three years.

What it means if you are buying

  • Your budget may have shrunk without you noticing. A mortgage in principle agreed a few months ago was based on the rates of the time. If rates have risen, the monthly cost of the same loan is higher, and some lenders will lend less on the same income.
  • A mortgage offer is worth more than it was. Offers usually hold their rate for a set period. If you already have one, the timing of your purchase matters more than it did, because a delay could mean re-applying at a higher rate.
  • The house still has to value. Rising rates tend to cool prices. That makes the lender’s valuer more cautious, not less, and a down-valuation is a bigger problem when your budget is already stretched.

What it means if you are selling

  • Your buyers are under the same pressure. Higher monthly costs make buyers more price-sensitive. Expect more questions, more comparison and firmer negotiation.
  • Check your buyer’s position, not just their offer. A buyer whose finance was arranged at older rates may find it is no longer enough. That risk sits quietly in the chain until it surfaces late.
  • Pricing matters more in a cooling market. The price a home launches at, measured against what comparable homes have actually sold for, carries more weight when buyers have less to spend.

Rates moving and not sure whether to press on or pause? Tell Jon about your situation and he will give you an honest, independent view.

Tell Jon about your situation

Jon’s view

Nobody can tell you where rates will be next year, and anyone who claims to is guessing. What you can control is the position you take into the market: finance that genuinely fits today’s rates, a price grounded in real sales evidence, and a clear view of how much room you have if something moves.