The average 5-year fixed mortgage rate in the UK is 4.58% in 2026 — above the historic low of 1.58% set in 2021, but broadly in line with the 30-year average of 4.74%. For borrowers who remortgaged at pandemic-era lows and now face renewal, the payment increase is substantial: on a £250,000 loan, monthly payments have risen by roughly £393 compared to 2021. The data below covers both the 5-year and 2-year fixed rate from 1995 to 2026, sourced from Bank of England monetary financial institutions (MFI) statistics.
UK Mortgage Rate Summary (1995–2026)
- The 30-year average 5-year fixed mortgage rate (75% LTV) is 4.74%
- The 30-year average 2-year fixed mortgage rate (75% LTV) is 4.63%
- Lowest 5-year fixed rate: 1.58% (2021)
- Highest 5-year fixed rate: 8.90% (1995)
- Lowest 2-year fixed rate: 1.62% (2021)
- Highest 2-year fixed rate: 8.13% (1995)
- Current 5-year fixed rate (2026 YTD): 4.58%
- Current 2-year fixed rate (2026 YTD): 4.82%
5-Year vs 2-Year Fixed Mortgage Rate — 1995 to 2026
The two most popular fixed-rate terms in the UK are the 5-year fix and the 2-year fix. Historically, 2-year rates were typically slightly lower than 5-year rates. Since 2022, however, this relationship inverted — 2-year rates rose sharply above 5-year rates as markets priced in expectations of future Bank of England rate cuts. This means borrowers fixing for 5 years can now lock in a lower rate than those fixing for 2 years.
The chart illustrates three distinct eras in UK mortgage rates:
- 1995–2007 (The high-rate normalisation era): Rates gradually fell from nearly 9% in 1995 to around 5–6% by the mid-2000s, tracking the Bank of England’s shift to inflation targeting and declining global long-term rates.
- 2009–2021 (The ultra-low rate era): Following the financial crisis, the BoE cut its base rate to a record low of 0.1% in March 2020. Mortgage rates tracked this downward trend, reaching all-time lows below 2% by 2021.
- 2022–2026 (The rate shock and normalisation): The Bank of England raised its base rate from 0.1% to 5.25% between 2022 and 2023 to combat inflation. Mortgage rates surged, peaking in 2023, and have since partially retraced as the BoE began cutting rates again.
5-Year Fixed Mortgage Rate History (1995–2026)
- 30-year average (1995–2026): 4.74%
- Lowest rate: 1.58% (2021)
- Highest rate: 8.90% (1995)
- Current 2026 YTD average: 4.58%
The 5-year fixed rate is the most popular mortgage product in the UK. Its appeal lies in payment certainty: borrowers lock their rate for five years, shielding themselves from short-term market movements. The 2021 low of 1.58% was extraordinary by any historical measure — roughly 3 percentage points below the long-run average — made possible only by the Bank of England’s emergency stimulus. Borrowers who secured a 5-year fix in 2020 or 2021 are still benefiting from those rates, but many will face renewals in 2025 and 2026 at substantially higher rates.
2-Year Fixed Mortgage Rate History (1995–2026)
- 30-year average (1995–2026): 4.63%
- Lowest rate: 1.62% (2021)
- Highest rate: 8.13% (1995)
- Current 2026 YTD average: 4.82%
The 2-year fixed rate peaked at 5.23% in 2023 — its highest level since 2008. At the same time the 5-year fixed peaked at 4.81%, creating an unusual situation where borrowers paid more to fix for a shorter period. This inversion reflects market expectations that Bank of England rate cuts would drive rates lower over the following years, making lenders willing to offer cheaper 5-year money. For borrowers in 2023 who chose a 2-year fix hoping to remortgage onto lower rates in 2025, that strategy has partially paid off — 2-year rates have fallen from 5.23% to around 4.82%.
How the Bank of England Base Rate Drives Mortgage Rates
UK mortgage rates do not directly track the Bank of England base rate — but it is the single most important input. The BoE base rate influences lender pricing through several channels:
| Channel | How It Works |
|---|---|
| Lender funding costs | Banks borrow at rates linked to the BoE base rate; higher base rate = higher wholesale funding costs |
| SONIA swap rates | Fixed mortgage rates are priced off SONIA (Sterling Overnight Index Average) swap rates, which embed market expectations for future BoE moves |
| Savings competition | When the BoE raises rates, banks must pay more on savings accounts, pushing up the cost of all lending |
| Inflation expectations | If inflation expectations fall, rate cuts become possible and mortgage rates decline ahead of actual BoE moves |
The BoE base rate went from 0.1% in January 2022 to 5.25% in August 2023 — a 5.15 percentage point increase in just 19 months. During the same period, the 5-year fixed mortgage rate rose from approximately 1.6% to nearly 6% at peak. Fixed rates actually rose more steeply than the base rate because SONIA swap markets priced in an even higher rate path than ultimately materialised. By mid-2024, the BoE began cutting its base rate. As of early 2026, the base rate stands at approximately 4.25%, and markets expect it to continue falling gradually — which is why fixed mortgage rates are easing.
What Your Rate Means for Monthly Payments: A Worked Example
Understanding the pound impact of rate changes is more useful than watching percentages in isolation. On a £250,000 mortgage over 25 years, here is what different historical rates mean for monthly payments:
| Rate | Era | Monthly Payment | Total Interest Paid |
|---|---|---|---|
| 1.58% | 2021 (historic low) | £1,008 | £52,400 |
| 2.06% | 2017 average | £1,072 | £71,600 |
| 3.38% | 2022 | £1,245 | £123,500 |
| 4.58% | 2026 current | £1,401 | £170,300 |
| 4.74% | 30-year average | £1,424 | £177,200 |
| 5.88% | 2008 peak | £1,593 | £227,900 |
| 8.90% | 1995 | £2,027 | £358,100 |
The payment shock from 2021 to 2026: A borrower who took a 5-year fix at 1.58% in 2021 and is now remortgaging at 4.58% faces a £393/month increase — £4,716 per year more on the same loan balance. On a £400,000 mortgage the increase is approximately £629/month.
On the positive side, current rates remain well below the levels that prevailed for most of the 1990s and 2000s. The 8.90% rate of 1995 would produce a monthly payment of £2,027 — £626/month more than today’s rate. Use the mortgage affordability calculator to model your specific property price and deposit.
Average UK Mortgage Rates by Year
These figures represent average annual rates for 5-year and 2-year fixed mortgages at 75% LTV based on Bank of England MFI statistics. The 2026 figure is the year-to-date average through Q1 2026.
Source: Bank of England MFI Statistics — fixed rate mortgages to households at 75% LTV. Annual figures are averages of monthly observations.
What Determines Your Mortgage Rate
The Bank of England and SONIA swap markets determine where average rates sit — but your personal financial profile determines which rate you qualify for within that range.
| Factor | Impact on Your Rate |
|---|---|
| Loan-to-value (LTV) | Biggest factor — 60% LTV gets best rates; 95% LTV pays 0.8–1.5% more |
| Credit score | Poor credit history can add 0.5–2%+ to your rate |
| Fixed term | 2-year fixes currently priced higher than 5-year in the UK |
| Property type | New builds, ex-local authority flats, and HMOs may attract higher rates |
| Arrangement fees | Low-rate deals often carry £999–£1,999 fees; compare total cost of credit not just headline rate |
| Lender type | High-street banks, building societies, and specialist lenders price differently |
The LTV effect is substantial. At 75% LTV, the 2026 average 5-year fixed is approximately 4.58%. At 90% LTV, add roughly 0.4–0.6%. At 95% LTV, add roughly 0.8–1.2%. For first-time buyers with a smaller deposit, this means significantly higher monthly payments than the headline averages shown above.
2-Year or 5-Year Fix in 2026?
With 2-year rates currently above 5-year rates (an inverted curve), the conventional wisdom of “fix short when rates are high” is less clear-cut in 2026.
| Scenario | Better Choice | Reason |
|---|---|---|
| You expect rates to fall significantly by 2028 | 2-year fix | Remortgage onto lower rates in 2 years |
| You value payment certainty | 5-year fix | Lower rate today, no renewal stress for 5 years |
| You may move or sell within 3 years | 2-year fix | Avoids early repayment charges (ERCs) on a 5-year product |
| Rates fall less than markets expect | 5-year fix | Already locked at a lower rate than 2-year |
The current market consensus (April 2026) is that the BoE base rate will continue to fall gradually but not sharply. In this environment the 5-year fix’s lower headline rate and longer certainty makes it the popular choice for most borrowers. See UK mortgage types explained for a full comparison of all fixed and variable options, and use the buy-to-let mortgage calculator if you are considering a rental investment.
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