Mortgage Rate Statistics in UK 2026
The UK mortgage market in 2026 is navigating one of the most complex rate environments of the past decade — caught between a Bank of England that cut rates four times in 2025 and the renewed upward pressure on fixed mortgage pricing triggered by Middle East conflict in March 2026 that sent oil prices, inflation expectations, and swap rates sharply higher. As of mid-May 2026, the average two-year fixed mortgage rate stands at approximately 5.81% and the average five-year fixed rate at 5.70%, according to Moneyfacts data cited by the HomeOwners Alliance — both substantially higher than the 4.83% and 4.94% recorded at the start of March 2026, and significantly above what most borrowers had been hoping for at the start of the year. The Bank of England base rate sits at 3.75%, held at its April 30, 2026 Monetary Policy Committee meeting, following four cuts that reduced it from 4.75% in January 2025.
For the 1.8 million UK homeowners whose fixed-rate mortgage deals expire in 2026 (UK Finance), the practical consequences of this rate environment are immediate and significant. Many are rolling off deals fixed in 2021 or 2022 at rates of 1.5% to 2.5% and into a market where average deals sit between 5.5% and 5.8% — a monthly payment shock that Moneyfacts has calculated at nearly £300 per month more on a typical £250,000, 25-year mortgage. Yet beneath the headline turbulence, the market has important structural features that provide context: mortgage arrears are falling (forecast to drop a further 5% in 2026 to 87,500), remortgage lending is growing (external remortgaging expected to reach £77 billion in 2026, up 10%), and some lenders are already cutting rates back from spring highs as inflation fell back to 2.8% in April 2026. This is not a mortgage crisis — it is a market in difficult, uneven, but functioning transition.
Interesting Facts: UK Mortgage Rates 2026
UK MORTGAGE RATES — KEY NUMBERS AT A GLANCE (MAY 2026)
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Bank of England base rate (Apr 30, 2026) 3.75% ████
Avg 2-yr fixed (May 2026, Moneyfacts) 5.81% ██████
Avg 5-yr fixed (May 2026, Moneyfacts) 5.70% ██████
Avg standard variable rate (SVR, May 2026) ~7.15% ████████
Avg 2-yr fixed (Mar 1, 2026, pre-conflict) 4.83% █████
Avg 5-yr fixed (May 2021 comparison) 2.57% ██
Best 2-yr fix at 60% LTV (May 2026) ~4.62% █████
Best 5-yr fix at 60% LTV (May 2026) ~4.25% █████
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| Fact | Data Point |
|---|---|
| Bank of England base rate (30 April 2026) | 3.75% — held; MPC voted 5–4 to hold (Feb 2026) |
| Bank of England base rate in January 2025 | 4.75% — 4 cuts during 2025 totalling −1.0pp |
| Next MPC meeting | 18 June 2026 |
| Average 2-year fixed mortgage rate (May 2026, Moneyfacts) | 5.81% |
| Average 5-year fixed mortgage rate (May 2026, Moneyfacts) | 5.70% |
| Average 2-year fixed (March 1, 2026 — pre-conflict) | 4.83% — before Middle East disruption |
| Average 5-year fixed (March 1, 2026 — pre-conflict) | 4.95% |
| Average 5-year fixed in May 2021 (comparison) | 2.57% — rate 3.13pp lower than May 2026 |
| Average 2-year fixed in May 2024 (comparison) | 5.91% — 0.10pp higher than May 2026 |
| Average standard variable rate (SVR, May 2026) | ~7.15% (some lenders above 8%) |
| UK BBA SVR mortgage rate (Feb 2026, Bank of England) | 6.59% (revert-to-rate weighted avg) |
| Best 2-yr fixed at 60% LTV (May 19, 2026) | ~4.62% (Rightmove/Moneyfacts avg; best-buys lower) |
| Best 2-yr fixed remortgage deal | 4.29% (First Direct, with £490 fee) |
| Best 5-yr fixed at 60% LTV (late April 2026) | ~4.25–4.50% with fee (various lenders) |
| Best 5-yr fixed at 90% LTV | ~4.85–5.10% |
| Avg 2-yr fix at 95% LTV (best no-fee, May 2026) | 5.60% (Nationwide) |
| Best 2-yr tracker at 95% LTV | 4.95% (Nationwide) |
| Best 5-yr BTL variable (May 2026) | 4.59% (Chorley Building Society, fee £999) |
| Average BTL 2-yr fixed (April 1, 2026) | 5.59% (up from 4.84% on March 1) |
| Average BTL 5-yr fixed (April 1, 2026) | 5.75% (up from 5.05% on March 1) |
| Effective rate on newly drawn mortgages (Feb 2026, BoE) | 4.10% |
| Effective rate on outstanding stock of mortgages (Feb 2026) | 3.95% |
| Mortgage approvals for house purchase (Feb 2026, BoE) | 62,600 — up from 60,200 in Jan |
| Remortgage approvals (Feb 2026, BoE) | 41,200 — up from 38,500 in Jan |
| Mortgage approvals (Jan 2026, BoE) | 59,999 — lowest since January 2024 |
| Fixed-rate mortgages expiring in 2026 | 1.8 million (UK Finance) |
| Fixed-rate mortgages that expired in 2025 | 1.6 million (UK Finance) |
| External remortgaging forecast 2026 | £77 billion (+10% year-on-year) |
| Product Transfer lending forecast 2026 | £261 billion (+2% year-on-year) |
| Mortgage arrears (end 2025) | 92,100 — down from 104,800 in 2024 |
| Mortgage arrears forecast (end 2026) | 87,500 (−5% further decline) |
| Monthly payment increase at 5.81% vs 2021 (£200k, 30 yrs) | ~£370/month more than at 2.57% |
| Monthly payment increase — typical £250k, 25-yr mortgage | ~£300/month more (pre-conflict low vs current avg) |
| Total value of outstanding UK mortgage balances | ~£1.6 trillion |
Source: Bank of England, Monetary Policy Committee decisions 2025–2026; Bank of England Mortgage Approvals data (Trading Economics, March–April 2026); Moneyfacts data cited in HomeOwners Alliance Mortgage Rate Forecast (21 May 2026) and MoneyWeek (18 May 2026); UK Finance, Mortgage Market Forecast 2026–2027 (December 2025); Uswitch UK Mortgage Rates Today (21 May 2026); Money to the Masses Best Mortgage Rates May 5, 2026; HomeOwners Alliance Best Mortgage Rates May 19, 2026; SmartSMS Solutions UK Mortgage Rates 2026 (April 2026)
The most striking contextual comparison in this entire dataset is a simple one: the average five-year fixed mortgage rate in May 2021 was 2.57%; in May 2026 it is 5.70% — a difference of 3.13 percentage points. On a £200,000 mortgage over 30 years, that gap translates to approximately £370 more per month in interest costs. For the millions of homeowners who fixed at historic lows in 2020 and 2021 and whose deals are now expiring — the so-called “remortgage cliff” — this is not an abstract statistic but a lived financial shock. Yet the data also reveals something counterintuitive: mortgage arrears are at their lowest level in years (92,100 at end of 2025, forecast to fall further to 87,500 in 2026), suggesting that most households have absorbed the rate shock through a combination of income growth, extended mortgage terms, and prudent underwriting standards that required lenders to stress-test applicants at rates well above the initial deal rate.
Bank of England Base Rate and UK Mortgage Rate History in 2026
BANK OF ENGLAND BASE RATE & AVERAGE FIXED RATES — TIMELINE
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Date | BoE Base | Avg 2-yr Fix | Avg 5-yr Fix | Key Event
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Nov 2021 | 0.10% | ~2.34% | ~2.57% | Rates near all-time low
Aug 2023 | 5.25% | ~6.80% | ~6.37% | Peak base rate
Dec 2024 | 4.75% | ~5.10% | ~5.00% | First cut of easing cycle
Jan 2026 | 3.75% | ~4.83% | ~4.91% | After 4 cuts in 2025
Mar 1, 2026 | 3.75% | ~4.83% | ~4.95% | Pre-Middle East conflict
Apr 1, 2026 | 3.75% | ~5.56% | ~5.54% | Post-conflict rate spike
Apr 30, 2026 | 3.75% | — | — | MPC holds; 5–4 vote
Mid-May 2026 | 3.75% | ~5.81% | ~5.70% | Near-peak of conflict surge
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| Date / Period | BoE Base Rate | Avg 2-Yr Fixed | Avg 5-Yr Fixed | Key Context |
|---|---|---|---|---|
| May 2021 | 0.10% | ~2.34% | 2.57% | Near all-time lows |
| September 2022 | 2.25% | ~4.74% | ~4.75% | Rate shock begins |
| October 2022 (Truss crisis) | 2.25% | 6.65% | 6.51% | Mini-budget market turmoil |
| August 2023 | 5.25% | ~6.80% | ~6.37% | Peak of rate cycle |
| November 2024 | 4.75% | ~5.10% | ~5.00% | First rate cut since 2020 |
| End 2025 / Jan 2026 | 3.75% | 4.83% | 4.91% | Four 2025 cuts complete |
| February 2026 | 3.75% | 4.85% | 4.94% | MPC holds; 5–4 vote |
| March 1, 2026 | 3.75% | 4.83% | 4.95% | Pre-conflict rate environment |
| April 1, 2026 | 3.75% | 5.56% | 5.54% | Post-conflict rate surge |
| April 30, 2026 | 3.75% (held) | ~5.60% | ~5.60% | MPC holds; inflation 3.3% |
| Mid-May 2026 | 3.75% | 5.81% | 5.70% | CPI falls to 2.8% in April |
Source: Bank of England, Monetary Policy Committee Decisions 2024–2026; Moneyfacts data cited in HomeOwners Alliance Mortgage Rate Forecast (21 May 2026); MoneyWeek Mortgage Rates Outlook (18 May 2026); Uswitch Bank of England Base Rate tracker (19 May 2026); Tembo Mortgage Rate Predictions 2026 (May 2026)
The history of UK mortgage rates from 2021 to May 2026 is a story in three acts. Act one was the era of historic low rates: from 2020 to late 2021, the Bank of England base rate sat at 0.10% — the lowest ever — and fixed mortgage rates fell to levels never seen before or since, with two-year deals available below 1.0% and five-year fixes at around 2.57%. Act two was the rate shock: between December 2021 and August 2023, the Bank raised rates 14 consecutive times to 5.25%, pushing average two-year fixed rates above 6.8% — the highest since the 2008 financial crisis — and triggering a sharp cooling in housing transactions and buyer confidence. The Liz Truss mini-budget in October 2022 added a temporary but extreme spike, pushing five-year rates briefly above 6.5% before the political crisis resolved.
Act three, beginning in November 2024, is the imperfect easing cycle. Four base rate cuts during 2025 brought the Bank rate from 4.75% to 3.75%, and mortgage rates fell in tandem — briefly touching near-4% for the best-available deals in early February 2026. Then Middle East conflict in March 2026 disrupted the trajectory: oil prices surged, inflation rose back to 3.3% in March 2026 from 3% in February, swap rates spiked, and lenders repriced fixed deals higher within weeks. By mid-May 2026, average two-year fixed rates stood at 5.81% — higher than at the start of 2026 — though a partial recovery was underway after UK CPI fell back to 2.8% in April. The Bank of England held rates at its April 30, 2026 meeting with a 5–4 vote in favour of a hold — the narrow margin reflecting genuine uncertainty about whether to cut further given inflation uncertainty or hold given economic weakness.
Average Fixed Mortgage Rates in UK 2026 — 2-Year vs 5-Year
2-YEAR vs 5-YEAR FIXED RATES — UK AVERAGE (MONEYFACTS, MONTHLY 2026)
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Month | Avg 2-Yr Fix | Avg 5-Yr Fix | Gap (2 vs 5)
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Jan 2026 | 4.83% | 4.91% | 5yr slightly higher
Feb 2026 | 4.85% | 4.94% | 5yr slightly higher
Mar 1 2026 | 4.83% | 4.95% | 5yr slightly higher ← pre-conflict
Apr 1 2026 | 5.56% | 5.54% | Near parity
Apr 2026 | 5.56% | 5.54% | Near parity
May 2026 | 5.81% | 5.70% | 2yr now higher
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Note: When 2-yr > 5-yr, market expects rates to fall. A typical choice.
| Metric | Jan 2026 | Mar 1, 2026 | Apr 1, 2026 | Mid-May 2026 |
|---|---|---|---|---|
| Average 2-year fixed rate | 4.83% | 4.83% | 5.56% | 5.81% |
| Average 5-year fixed rate | 4.91% | 4.95% | 5.54% | 5.70% |
| Spread (2yr minus 5yr) | −0.08pp | −0.12pp | +0.02pp | +0.11pp |
| Rate relationship | 5yr > 2yr | 5yr > 2yr | Near parity | 2yr > 5yr — market expects falls |
| Monthly repayment: £200k, 30yr, 2-yr fix | — | ~£1,056 | ~£1,189 | ~£1,220 |
| Monthly repayment: £200k, 30yr, 5-yr fix (May 2021) | — | — | — | ~£849 (2.57%) |
| Increase in monthly cost vs May 2021 (5-yr) | — | — | — | +£371/month |
Source: Moneyfacts data cited in HomeOwners Alliance Best Mortgage Rates (19 May 2026) and Mortgage Rate Forecast (21 May 2026); MoneyWeek UK Mortgage Rates (18 May 2026); HomeOwners Alliance illustration based on Moneyfacts data (30 April 2026)
The relationship between two-year and five-year fixed mortgage rates in 2026 carries a clear market signal. Through January and February 2026, five-year rates were slightly higher than two-year rates — the normal configuration when markets expect rates to remain elevated or rise further, as borrowers pay a premium for longer-term certainty. By May 2026, this has flipped: the two-year rate at 5.81% is 0.11 percentage points above the five-year rate of 5.70%. This “inverted” relationship — technically an inverted yield curve on fixed mortgages — signals that markets expect Bank of England rates to fall over the next few years, and lenders are pricing that expectation into longer-term deals. Historically, when two-year rates sit above five-year rates, it has often been a reasonable indicator that fixed rates are near a peak and may fall over the subsequent 18–24 months.
For borrowers making a product choice in May 2026, the practical implication is significant. Choosing a two-year fix offers flexibility — remortgaging in 2028 into potentially lower rates — but carries a higher starting rate and higher monthly cost today. Choosing a five-year fix at 5.70% locks in a slightly lower rate for certainty, but risks being locked out of a potentially much lower market if the Bank of England cuts rates more aggressively than currently expected. MoneyWeek notes that variable and tracker mortgages are now more than twice as popular compared to six months ago — a behavioural shift reflecting borrowers choosing to float in the hope of near-term rate cuts rather than locking into what many perceive as a temporary peak. The specific circumstances of each borrower — equity, income security, risk tolerance, and timing of deal expiry — should always drive the product decision over any headline average.
UK Mortgage Rates by Loan-to-Value (LTV) in 2026
FIXED MORTGAGE RATES BY LTV — UK (MAY 2026, ILLUSTRATIVE BEST-BUYS)
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LTV | Deposit | Avg 2-yr Fix | Best 2-yr Fix | Best 5-yr Fix
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60% | 40% | ~4.62% | ~4.47% | ~4.25–4.50%
75% | 25% | ~4.87% | ~4.82% | ~5.02%
80% | 20% | ~5.14% | ~4.90% | ~5.06%
85% | 15% | ~5.28% | ~5.28% | ~5.14%
90% | 10% | ~5.60% | ~5.28–5.90% | ~4.85–5.10%
95% | 5% | ~5.60–5.76% | ~5.60% | ~4.97% (no fee)
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LTV premium: 95% borrower pays ~£5,496 more over 2yrs than 60% LTV
| Loan-to-Value (LTV) | Min. Deposit | Avg 2-Yr Fix (May 2026) | Best 5-Yr Fix (May 2026) |
|---|---|---|---|
| 60% LTV | 40% deposit | ~4.62% (Rightmove/Moneyfacts avg) | ~4.25–4.50% (with fee) |
| 60–75% LTV | 25–40% deposit | ~4.82–4.87% | ~5.02% (fee-free ~5.10%) |
| 75–80% LTV | 20–25% deposit | ~4.90–5.14% | ~5.06–5.11% |
| 80–85% LTV | 15–20% deposit | ~5.14–5.28% | ~5.14% |
| 85–90% LTV | 10–15% deposit | ~5.28–5.60% | ~4.85–5.10% |
| 90–95% LTV | 5–10% deposit | ~5.60% | ~4.97% (no fee) / ~4.70–5.10% (with fee) |
| 95% LTV (best no-fee 2-yr) | 5% deposit | 5.60% (Nationwide) | — |
| 95% LTV best tracker | 5% deposit | 4.95% tracker (Nationwide) | — |
| LTV cost premium (95% vs 60%, 2yr deal) | — | — | ~£5,496 more over 2 years |
Source: Nationwide Intermediary Product Guide (May 2026); HomeOwners Alliance Best Mortgage Rates (19 May 2026); HomeOwners Alliance First-Time Buyer Mortgage Rates (12 May 2026); Money to the Masses Best Mortgage Rates (5 May 2026); PocketWise Best Mortgage Rates UK 2026 (March 2026); Krediks Mortgage Rates UK 2026 (April 2026)
The loan-to-value ratio is one of the most powerful determinants of the mortgage rate a borrower is offered in the UK, and the 2026 data illustrates that premium with precision. The difference between a 60% LTV two-year fixed rate (around 4.62% on average) and a 95% LTV two-year fixed rate (around 5.60%) is approximately 0.98 percentage points — equivalent to roughly £110 per month more on a £200,000 mortgage over 25 years at the higher LTV. Over a two-year fixed term, a 95% LTV borrower pays approximately £5,496 more than a 60% LTV borrower on the same loan (PocketWise analysis). This premium exists because lenders treat high-LTV lending as higher risk — if the borrower defaults and house prices have fallen, the lender’s security is under greater threat.
The 95% LTV market — largely the territory of first-time buyers — received a significant structural boost from the Mortgage Guarantee Scheme launched in July 2025, which encourages lenders to offer 95% mortgages by having the government guarantee a portion of the loan. The best 95% no-fee two-year fixed deal of 5.60% (Nationwide) and the best 95% tracker deal of 4.95% (Nationwide) reflect a market that has opened up meaningfully to lower-deposit buyers compared to 2023 when 95% products were largely scarce. First-time buyer fixed rates across the range run between 3.79% and 5.60% depending on LTV and product type (Mortgage Introducer, May 2026). One important planning note for first-time buyers: lenders stress-test affordability at the current rate plus approximately 3%, meaning a borrower applying for a 5.6% deal must demonstrate they could afford repayments at approximately 8.6% — a hurdle that continues to constrain borrowing capacity even as headline rates ease.
UK Variable and Tracker Mortgage Rates in 2026
UK VARIABLE MORTGAGE RATES — COMPARISON (MAY 2026)
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Product Type | Current Rate | Key Feature
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Standard Variable Rate | ~7.15–8%+ | Default rate; avoid if possible
Bank BoE UK avg SVR (BoE) | 6.59% | Weighted revert-to-rate (Feb 2026)
Tracker (best 60% LTV) | 4.14% | Base +0.39% (Nationwide, £999 fee)
Tracker (best 60% no-fee) | 4.69% | Base +0.94% (Nationwide)
Tracker (best 95% LTV) | 4.95% | Nationwide; no fee
Tracker (BTL, BoE+1.35%) | 5.10% | Paragon, single self-contained prop
Discount mortgage | Varies | Set % below lender SVR
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Variable/tracker popularity: more than DOUBLE that of 6 months ago| Variable / Tracker Product | Rate (May 2026) | Key Detail |
|---|---|---|
| Average Standard Variable Rate (SVR) | ~7.15% (some lenders above 8%) | Default rate — most expensive; avoid |
| Bank of England BBA SVR (weighted avg, Feb 2026) | 6.59% | Official weighted revert-to-rate |
| Tracker — best 60% LTV, with fee | 4.14% (Base Rate +0.39%) | Nationwide, £999 fee |
| Tracker — best 60% LTV, no fee | 4.69% (Base Rate +0.94%) | Nationwide |
| Tracker — best 75–80% LTV | 4.24–4.29% (Base Rate +0.49–0.54%) | Nationwide |
| Tracker — best 95% LTV | 4.95% (Nationwide) | 5% deposit borrowers |
| Tracker mortgage popularity vs 6 months ago | More than 2× as popular | MoneyWeek, May 2026 |
| BTL tracker (Paragon, single property) | 5.10% (Base Rate +1.35%) | No ERCs; flexible exit |
| Discount mortgage | SVR minus a fixed % | Moves with lender SVR; variable risk |
| Base rate impact on trackers | Direct 1:1 on most tracker deals | Cuts = immediate rate reduction |
Source: Bank of England BBA Mortgage Rate data (Trading Economics, March 2026); Nationwide Intermediary Product Guide May 2026; NRLA Buy-to-Let Market Update February 2026; Paragon tracker product launch February 2026; MoneyWeek UK Mortgage Rates (18 May 2026); Uswitch UK Mortgage Rates Today (21 May 2026)
The standard variable rate (SVR) remains the single worst outcome for any UK mortgage borrower in 2026 — averaging around 7.15% and with some lenders charging above 8%, it is between 1.3 and 2.3 percentage points higher than the average two-year fixed deal, and roughly 3 to 3.4 percentage points above the best available tracker products. The Bank of England’s own measure — the BBA weighted average revert-to-rate — was 6.59% in February 2026, confirming the SVR as a materially expensive default product. Any borrower whose fixed deal has expired and who has not actively remortgaged is likely sitting on their lender’s SVR, and the data suggests there are hundreds of thousands of households in this position. The urgency of remortgaging off the SVR is one of the most straightforward actions available to reduce household mortgage costs in 2026.
Tracker mortgages have surged in popularity, with MoneyWeek confirming they are more than twice as popular as they were six months ago. The reason is clear: in an environment where markets expect the Bank of England to cut rates further — even if the path is slower than expected — a tracker deals cuts automatic pass-through of rate reductions without the need to remortgage again. The best 60% LTV tracker at 4.14% (Base Rate + 0.39%) undercuts the average two-year fixed rate of 5.81% by 1.67 percentage points — a very large gap that explains the shift in borrower behaviour. The critical risk is the reverse: if the Bank of England is forced to raise rates — a scenario that markets now consider possible if Middle East conflict keeps energy prices and inflation elevated — tracker borrowers face immediate payment increases with no protection. The tracker vs fixed decision is ultimately a bet on the Bank of England’s rate trajectory over the next 12–24 months.
Buy-to-Let Mortgage Rates in UK 2026
BUY-TO-LET MORTGAGE RATES — UK TREND (MONEYFACTS DATA)
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Date | Avg BTL 2-Yr Fix | Avg BTL 5-Yr Fix | Change
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Jan 2026 | ~4.60% | ~5.00% | Gradual decline
Mar 1, 2026 | 4.66% | 5.05% | Pre-conflict
Apr 1, 2026 | 5.44% | 5.75% | Post-conflict spike
May 2026 | ~5.28%+ | ~5.40%+ | Partial recovery
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Landlords off 5-yr fix (2021): monthly payments up 28.5%
Landlords off 2-yr fix (Apr 2026): monthly payments up 3.4%
BTL products available (Q1 2026): consistently above 5,000; peak 5,529
| BTL Mortgage Metric | Data Point | Context |
|---|---|---|
| Avg BTL 2-yr fixed rate (March 1, 2026) | 4.66% | Pre-conflict — near 2025 low |
| Avg BTL 2-yr fixed rate (April 1, 2026) | 5.44% | Post-conflict spike (+0.78pp in 1 month) |
| Avg BTL 5-yr fixed rate (March 1, 2026) | 5.05% | Pre-conflict |
| Avg BTL 5-yr fixed rate (April 1, 2026) | 5.75% | Post-conflict spike (+0.70pp) |
| Best BTL 5-yr variable (May 18, 2026) | 4.59% (Chorley BS, fee £999) | Below avg fixed |
| BTL tracker — base rate +1.35% (Paragon) | 5.10% | No early repayment charges |
| Total BTL properties in UK (2025) | 4.7 million (~1 in 5 households) | Finder.com / UK data |
| Total BTL lending (2024) | £20.5 billion (+12% from £18.3bn in 2023) | UK Finance |
| New BTL lending (2025) | £11 billion (+11% year-on-year) | UK Finance |
| BTL lending forecast (2026) | £11 billion (unchanged) | UK Finance |
| Average BTL rental yield (UK, Q3 2025) | 7.15% | Finder.com |
| Landlords off 5-yr fix (2021) — payment change | +28.5% higher monthly payment | Hamptons |
| Landlords off 2-yr fix (Apr 2026) — payment change | +3.4% higher monthly payment | Hamptons |
| BTL products available (Q1 2026 consistent) | Above 5,000; peak 5,529 | Moneyfacts via Which? |
| Renters’ Rights Act Section 21 abolition | 1 May 2026 (in effect) | Moneyfactscompare |
Source: Moneyfacts data cited in Which? Buy-to-Let Mortgage Rates (April 2026); HomeOwners Alliance Best BTL Mortgage Rates (18 May 2026); NRLA Buy-to-Let Market Update (January–February 2026); Hamptons analysis cited in Which?; Finder.com UK Buy-to-Let Statistics 2026 (April 2026); UK Finance Mortgage Market Forecast 2026–2027 (December 2025)
The buy-to-let mortgage market in 2026 has been hit by the same rate disruption as the residential market, but against a backdrop of additional structural headwinds that make the landlord calculation more complex. The average BTL two-year fixed rate surged from 4.66% on March 1 to 5.44% on April 1, 2026 — a jump of 0.78 percentage points in a single month driven by Middle East conflict and swap rate movements. For landlords whose five-year fixed deals taken out in 2021 are now expiring, Hamptons analysis found monthly mortgage payments have risen by 28.5% — a squeeze that, combined with a rental yield of 7.15% nationally, still allows positive cash flow in many cases but significantly compresses landlord margins and has driven continued exits from the sector. The picture is less severe for those coming off two-year fixes: landlords rolling off two-year deals in April 2026 saw monthly costs rise just 3.4%.
Despite these pressures, the BTL market has not collapsed. 5,529 BTL mortgage products were available in April 2026 — the highest monthly figure seen in Q1 2026 — demonstrating that lender appetite to serve the landlord market remains, even as rates rise. The total value of BTL lending in 2024 was £20.5 billion (up 12%), and 2025 saw £11 billion in new BTL lending, with the same figure forecast for 2026 (UK Finance). The entry into force of the Renters’ Rights Act on 1 May 2026 — which abolishes Section 21 no-fault evictions and gives tenants enhanced rights — has added another layer of regulatory complexity for landlords, and Moneyfactscompare warns this could prompt further landlord exits, tightening rental supply and sustaining high rents even as price growth moderates.
UK Mortgage Approvals and Remortgage Market in 2026
UK MORTGAGE APPROVALS FOR HOUSE PURCHASE — BANK OF ENGLAND (2026)
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Month | Purchase Approvals | Remortgage Approvals | Effective Rate
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Dec 2025 | 61,013 | ~38,400 | ~4.09%
Jan 2026 | 59,999 ← 2yr low | 38,100 | 4.09%
Feb 2026 | 62,600 ↑ | 41,200 ↑ | 4.10%
Outstanding stock eff. rate (Feb 2026): 3.95%
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2026 full-year remortgage forecast (UK Finance):
External remortgage: £77 billion (+10% YoY)
Product transfers: £261 billion (+2% YoY)
Fixed-rate deals expiring: 1.8 million
| Metric | Dec 2025 | Jan 2026 | Feb 2026 |
|---|---|---|---|
| Mortgage approvals — house purchase | 61,013 | 59,999 ← 2-yr low | 62,600 |
| Mortgage approvals — remortgage | ~38,400 | 38,100 | 41,200 |
| Effective rate — newly drawn mortgages | ~4.09% | 4.09% | 4.10% |
| Effective rate — outstanding stock | ~3.90% | 3.90% | 3.95% |
| UK Finance: external remortgage forecast 2026 | — | — | £77 billion (+10%) |
| UK Finance: product transfers forecast 2026 | — | — | £261 billion (+2%) |
| Fixed-rate mortgages expiring in 2026 | — | — | 1.8 million |
| Mortgage arrears at end 2025 | 92,100 | — | Down from 104,800 in 2024 |
| Mortgage arrears forecast end 2026 | — | — | 87,500 (−5%) |
| House purchase lending forecast 2026 | — | — | £180 billion (+2%) |
Source: Bank of England Mortgage Approvals data (Trading Economics, March–April 2026); UK Finance, Mortgage Market Forecast 2026–2027 (December 2025); UK Finance Insights press release (December 2025)
The Bank of England’s mortgage approvals data for January and February 2026 offers a real-time snapshot of buyer and remortgager sentiment at the start of the year, before the spring rate disruption. January 2026 saw purchase approvals fall to 59,999 — the lowest since January 2024 — reflecting the natural demand hangover following the March 2025 stamp duty rush and cautious buyer sentiment in the post-Budget period. February recovered to 62,600, above market expectations, signalling underlying resilience. The effective interest rate on newly drawn mortgages — the rate borrowers are actually paying on new deals, blending fixed, tracker, and variable products — stood at 4.10% in February 2026, far below the headline average two-year fixed rate of ~4.85% at that time, because many borrowers were accessing best-buy deals well below the average, and tracker products at lower rates were growing in share.
The structural centrepiece of the 2026 mortgage market is the remortgage wave. With 1.8 million fixed-rate deals expiring during the year — following 1.6 million in 2025 — and UK Finance projecting external remortgaging to reach £77 billion (up 10%) alongside £261 billion in product transfers (up 2%), the remortgage market will dominate lender activity throughout the year. For most of the 1.8 million expiring borrowers, rolling onto their lender’s SVR of 7.15%+ is deeply unattractive, and the data confirms that most act — either through a product transfer with their existing lender or by switching. The forecast 5% further decline in mortgage arrears to 87,500 by end 2026 is a testament to this proactive behaviour and to the resilience of UK household finances under rate stress — though it should be noted that arrears at 92,100 are still more than three times the pandemic-era low of around 25,000 recorded in 2021 when base rates were near zero.
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