Lenders have been repricing ahead of the Bank of England’s Monetary Policy Committee (MPC) vote on Thursday, causing fixed mortgage rates to hit a three-year high, Moneyfactscompare.co.uk analysis reveals.
Moneyfacts data shows a challenging environment to reprice fixed rate mortgage deals has created a mix of activity from lenders over recent weeks.
This comes as the market expects the bank’s interest rate to rise by 0.25% tomorrow (5 November).
A Reuters poll of 63 economists found 54 expect the Bank to increase rates by 25 basis points from 3.75% to 4%, a sharp turnaround from September when around 90% predicted rates would remain unchanged for the rest of 2026.
A hike would be the first increase in the base rate since August 2023.
Moneyfacts suggests major lenders could pivot over the coming days if future pricing expectations stabilise.
However, the lowest two-year fixed rates from Barclays, HSBC, Lloyds Bank, NatWest and Santander remain 0.44% higher on average versus the start of September.
The Moneyfacts average new mortgage rate has hit a three-year high, rising to 5.89%, up from 5.83% at the start of October.
It was last recorded higher in November 2023 at 6.07%.
The average two-year fixed mortgage rate has risen by 1.14% since January 2026, up from 4.83% to 5.97%, now its highest point since December 2023 when it stood at 6.04%.
Moneyfacts finance expert Rachel Springall says: “Mortgage rates have risen to a three-year high as a result of lenders grappling to re-adjust rates amid swap rate volatility.”
“Major lenders expect an imminent rise to the Bank of England Base Rate (BBR), their lowest rates are now priced 0.44% higher than they were at the start of September.”
“Lenders could well pivot away from making aggressive rises over the coming weeks, but most of the damage is unlikely to unwind entirely. Lenders look at their margins very carefully, so it would be unwise to price deals too low when uncertainty remains.”
“If the MPC indicate a calmer path on future rate expectations, fixed mortgage rates could reduce slightly before the year is over, as some may have overcompensated for swap rate rises.”
“A BBR rise would be the first hike in three years, yet with conflicts in the Middle East and between Russia and Ukraine remaining on a knife-edge, prolonged pressure on global inflation could worsen the outlook for UK interest rates.”
