Key takeaways
- The average two-year fixed rate was 5.98% on 5 October 2026 and the average five-year fix had reached 6%, on Moneyfacts readings taken that morning.
- On a £250,000 repayment loan over 25 years, 6.00% costs £1,610.75 a month against £1,389.58 at 4.50%, a gap of £221.17.
- Each half point adds £28.76 to £30.21 a month for every £100,000 borrowed over 25 years, so £350,000 moves in steps of about £103.
- The Bank of England's quoted two-year rate at 75% loan to value was 5.13% in September 2026, 85 basis points below the Moneyfacts average and £127.23 a month cheaper on £250,000.
- Bank Rate has been 3.75% since 18 December 2025, yet that quoted two-year rate went from 3.93% in January 2026 to 5.13% in September.
Mortgage rates in October 2026 sit close to 6% on the headline averages. On 5 October the average two-year fixed rate was 5.98% and the average five-year fix had reached 6%, both on Moneyfacts readings taken that morning. Those are averages of products, not of borrowers, and the figure most people want is the one on their own statement. So here it is first. A £250,000 repayment loan over 25 years costs £1,607.70 a month at 5.98%, and £1,389.58 at 4.50%. The rest of this piece is about where in that range your own number lands, and why the headline average probably isn't it.
What mortgage rates in October 2026 cost a month on £150,000, £250,000 and £350,000
The grid below is capital and interest over a 25-year term. No fees, no overpayments, no fee added to the balance. Four rates, because the Bank of England's quoted two-year fix moved more than a point inside nine months and nobody knows where it settles. Read down to your balance, then across to the rate you have actually been offered.
| Loan over 25 years | 4.50% | 5.00% | 5.50% | 6.00% |
|---|---|---|---|---|
| £150,000 | £833.75 | £876.89 | £921.13 | £966.45 |
| £250,000 | £1,389.58 | £1,461.48 | £1,535.22 | £1,610.75 |
| £350,000 | £1,945.41 | £2,046.07 | £2,149.31 | £2,255.05 |
Across the whole 1.50 point span the monthly cost rises by £132.70 on £150,000, £221.17 on £250,000 and £309.64 on £350,000. Those are the numbers that decide whether a move happens. The total cost over the term is larger and less visible. On £250,000, the 300 payments at 4.50% hand the lender £166,874 in interest. At 6.00% the same loan hands over £233,226, which is £66,352 more for the same house.
Each half point costs under £31 a month per £100,000 borrowed
There's a shortcut buried in that grid. A £100,000 slice of balance costs £555.83 a month at 4.50%, £584.59 at 5.00%, £614.09 at 5.50% and £644.30 at 6.00%. Each half point adds between £28.76 and £30.21. Multiply by your balance in hundreds of thousands and you land within a few pounds of the table, which is why the three rows are near-multiples of each other.
The shortcut works because the payment is close to a straight line in the rate across a narrow band. It stops working over wider spans, because the relationship is a curve: the steps above get bigger as the rate rises, from £28.76 to £30.21 across just 1.50 points. It also assumes the term stays at 25 years. A shorter term raises every figure in the table and shrinks the step between the columns.
The 5.98% average is not the rate a 25% deposit gets quoted
Two different numbers get called the average mortgage rate, and in October 2026 they were 85 basis points apart. Moneyfacts averages the rate on every fixed product on sale, whatever deposit it demands and whatever fee it carries. The Bank of England publishes something narrower. Its series IUMBV34 is the "Monthly interest rate of UK monetary financial institutions (excl. Central Bank) sterling 2 year (75% LTV) fixed rate mortgage to households", and in September 2026 it read 5.13%.
On £250,000 over 25 years those two readings are £1,480.47 and £1,607.70. The gap is £127.23 a month, or £1,526.76 over a year, for the same house and the same term. Neither figure is wrong. They measure different populations of products, and a borrower with a 25% deposit meets the lower one. The five-year series tells the same story: 4.98% at the Bank in September 2026 against 6% at Moneyfacts in October.
The dates differ too, and that matters. The Bank's number is a monthly average for September 2026. The Moneyfacts number is one morning, 5 October 2026, a week into a month in which pricing moved fast. So part of the 85 basis points is which products are in the average, and part is a fortnight of repricing that the Bank's September figure hadn't yet picked up.
Bank Rate hasn't moved since 18 December 2025, and fixed rates moved anyway
Bank Rate has been 3.75% since 18 December 2025, on the Bank's own daily series. Over the nine months that followed, the quoted two-year fix at 75% loan to value ran 3.93%, 3.97%, 4.45%, 5.14%, 4.91%, 4.80%, 4.79%, 4.92% and 5.13%. That is the chart below. The policy rate didn't change once across that run, and the fix still rose 1.20 points from January 2026 to September.
The standard variable rate is the control in that experiment. The Bank's quoted standard variable rate was 6.58% in April 2026 and 6.58% in September 2026, flat across the months in which the fix moved most. On £250,000 over 25 years, 6.58% costs £1,700.54 a month, which is £220 more than September's two-year fix. That is the cost of a fix running out and not being replaced, and the shape of the jump for a fixed rate ending depends on the balance left and the years left, not on the headline average.
Swap rates, not the 5 November vote, set the number on a fixed offer
The mechanism is written down in the Bank's own financial stability record. In the record of its meeting on 27 March 2026, the Financial Policy Committee stated that Overnight Index Swap rates "are used as the benchmark for fixed-rate mortgage pricing". A swap rate is what the market charges today to fix an unknown series of future overnight rates. It is a price for the whole path, not for the next decision.
That is why a fix gets more expensive while Bank Rate sits still. The same record describes it happening: "Since the beginning of the conflict in the Middle East, swap rates had increased, resulting in quoted mortgage rates rising, and some mortgage products being withdrawn. Average rates for two-year and five-year fixed-rate mortgages had risen by an estimated 80 basis points and 70 basis points respectively, based on average daily rates data." The committee added that the mortgage move was smaller than the swap move, so the pass-through is partial rather than mechanical.
Lenders describe the same channel. Rachel Springall, finance expert at Moneyfactscompare.co.uk, said on 5 October 2026 that "The past few weeks have seen pricing margins among major lenders come under immediate pressure from renewed swap rate volatility."
Nine deals under 5%, where there were nearly 1,500 a month earlier
Availability moved faster than the average did. Moneyfacts counted nearly 1,500 fixed products priced below 5% at the beginning of September 2026, and nine deals by 5 October. Variable products under 5% barely moved over the same stretch, from 411 to 389. That asymmetry is the swap channel showing up in a product count: a variable deal is priced off a policy rate that didn't move, a fixed one off a curve that did.
March 2026 ran a smaller version of the same script. Moneyfacts recorded 472 residential mortgage products withdrawn in the 48 hours to 11 March 2026, around 6.5% of the market, leaving 7,164 available. Its average two-year fix was 5.01% that day, up from 4.84% five days earlier, and the five-year was 5.09%. The FPC put the market's total count at the time as having "fallen from around 8,500 to 7,000", which lines up with the Moneyfacts figure.
Volume has not collapsed with the pricing, and that is worth holding onto. Net mortgage approvals for house purchase were 54,900 in August 2026. Gross mortgage advances were £77.4 billion in 2026 Q2 on the Financial Conduct Authority's count, up 11.1% on the previous quarter. Higher pricing has not yet emptied the market.
What 28 October and 5 November do and do not settle
Two dates are carrying a lot of the coverage. The Chancellor asked the Office for Budget Responsibility "to prepare an economic and fiscal forecast for publication on 28 October 2026", which fixes the Budget to that day. The next MPC announcement is Thursday 5 November, with the last of the year on Thursday 17 December. Whether interest rates go up in November is a separate question from what a fixed offer costs, and the two move on different information.
What 5 November settles is Bank Rate. At the meeting ending on 16 September 2026 the committee voted by a majority of 6 to 3 to maintain Bank Rate at 3.75%, with three members preferring a 0.25 percentage point increase that would have taken it to 4%. Twelve-month CPI inflation had been 3.1% in August 2026. The November outcome is unknown until it is announced, and reporting of what the Budget might contain is not a basis for arithmetic, so no figure in this piece uses it.
What neither date settles is the rate on a fixed offer. A fix is priced off the swap curve, and the curve already holds a view about both events. If the decision matches what the curve holds, fixed pricing need not move at all on the day. Questions about mortgage rates after the Budget are really questions about what gilt and swap markets do in the days around it, which is a different thing from what the Budget says.
Whether mortgage rates will go up in 2027 is not in the published data
Plenty of people searching for mortgage rates in October 2026 predictions want one number for next year. Nothing in the sources above supplies it. The MPC publishes a decision and a vote, not a path. The swap curve is a price, and the FPC's own record treats it as a market reading that moves with events rather than as a forecast.
What the published data does give you is a conditional. Fixed pricing follows the swap curve with partial pass-through, so whether mortgage rates will go up in 2027 depends on what the curve does, and the curve depends on the inflation and policy outlook. The FPC did put a scale on the refinancing side: on March 2026 OIS rates, it judged that "around 5.2 million (58%) mortgagors could face increases in mortgage repayments by 2028 Q4". That is a count of people facing an increase, not a size for the increase.
The strongest case that this is a scare rather than a shift
The counter-case deserves its best shot, and three things support it. First, on the Bank's own measure the year's high was set in the spring, not the autumn: September 2026's 5.13% was fractionally below April 2026's 5.14%. A reader who saw the April coverage has seen this before.
Second, the five-year series at 4.98% in September 2026 sat below the two-year at 5.13%, which is the shape a curve takes when the market expects lower rates further out. The historical record on fixed vs variable mortgage choices since 1997 shows how much of that outcome is set by the start month alone. Third, the FPC's March 2026 judgement was that "typical increases in mortgage payments would remain modest in comparison to those experienced in recent years, as most mortgagors were already on higher rates". The committee's reasoning is that most borrowers had already repriced once, so the next step up is a smaller one.
Oliver Dack of Mortgage Advice Bureau made the affordability version of the argument on 5 October 2026: "although mortgage rates have been creeping higher, wage growth has outpaced house price growth, which may help offset some of the impact of higher borrowing costs on affordability". That is a claim about the ratio, not about the rate, and it cuts the other way if pay growth slows.
What the quoted series cannot tell you about your own offer
Both averages describe products offered, not loans transacted, and no individual borrower was charged exactly 5.98% or 5.13%. Neither series captures a product fee, an early repayment charge on the deal you're leaving, or a lender's own product transfer range, which never enters a published average at all. The 75% loan to value cut is one band of many. A borrower with a 10% deposit is not in that band at all, and the series does not say what they are quoted.
The table's limitations are worth stating plainly. It assumes a repayment loan, a 25-year term, an unchanged balance and no fee rolled up. The average UK house price was £272,000 in the 12 months to June 2026, so a 25% deposit on an average house is a £204,000 loan, which falls between two rows: £1,208.07 a month at 5.13% and £1,311.88 at 5.98%. A daily average is also a snapshot, and a volatile one. The Moneyfacts two-year reading went from 5.96% on 2 October 2026 to 5.98% on 5 October.
What would change these numbers
The swap curve is the thing to follow, not the headline average. The March 2026 episode shows how fast it travels: the Bank's quoted two-year series went from 4.45% in March to 5.14% in April 2026. A sustained fall does the same in reverse, and the whole table shifts a column.
Three specific things would change the arithmetic here. If the MPC moves Bank Rate on 5 November, the 6.58% standard variable rate moves with it while existing fixes don't, which widens or narrows the £220 gap between it and September's two-year fix. If the gap between the Moneyfacts average and the Bank's quoted rate closes, low-deposit pricing has come back into line and the 85 basis points stops being a deposit story. And if products under 5% return in numbers, the nine deals counted on 5 October 2026 were a pricing lag rather than a level. Both averages publish again before the December meeting, and the distance between them is the number worth reading.