Fixed mortgage rates falling despite Bank Rate rise to 4%
Fixed mortgage rates falling while Bank Rate rises sounds strange, yet borrowers are seeing exactly that. On 5 November 2026, the Bank of England raised Bank Rate from 3.75% to 4%. It was the first rise in more than three years, and the vote was 8–1. However, several big lenders cut their fixed rates around the same time, rather than raising them. So what is going on, and what does it mean if your deal is ending soon?
Why are fixed mortgage rates falling after a Bank Rate rise?
The main reason for fixed mortgage rates falling is that lenders do not price fixes from Bank Rate. Instead, they use swap rates, which reflect where markets expect interest rates to go over time. A two-year fix, for example, is priced on what markets think rates will average over two years.
In addition, this rise was widely expected, so lenders had already built it into their pricing. Moneyfacts reported Nationwide, Virgin Money, Lloyds Bank and Yorkshire Building Society cutting fixed rates before the decision.
Competition also matters, because lenders still need to attract new borrowers and hit their lending targets. As a result, one lender may cut rates while another raises them in the same week.
Why did the Bank of England raise rates?
Inflation rose to 3.5% in September, up from 3.1% in August, according to the ONS. Motor fuel was the biggest driver, with prices up almost 30% on a year earlier. Higher energy costs linked to conflict in the Middle East have pushed up fuel and household bills. Therefore, the Bank acted to stop inflation settling further above its 2% target.
Notably, one committee member, Catherine Mann, voted for a bigger rise to 4.25%. This came after a 3.75% hold in September, covered in our base rate forecast.
Are fixed mortgage rates falling for everyone?
Not quite, because the effect of the rise depends on the type of mortgage you have. Even so, Moneyfacts says its average new mortgage rate hit a three-year high of 5.89% in early November.
- Fixed rate: your rate and monthly payment stay the same until your fixed deal comes to an end.
- Tracker: your rate will usually rise by 0.25%, so check your lender’s letter for when it applies.
- Standard variable rate: your lender can choose to raise its rate, and many pass on Bank Rate rises.
- Deal ending soon: this is where falling fixed rates matter most, because your next deal is still being priced.
To see what a rate change means for you, try our rate change calculator.
Will fixed rates keep coming down?
Nobody can say for certain, and anyone who promises otherwise is guessing. If inflation eases, markets may expect cuts next year, and fixed rates could become cheaper. On the other hand, stubborn inflation could bring further rises and push swap rates back up.
The Bank’s next decision is due on Thursday 17 December 2026, so expect more movement before then. For that reason, waiting for the perfect rate is a gamble most borrowers do not need to take.
What to do if your fixed rate ends in the next six months
- Start early. Many lenders let you secure a new rate up to six months before your deal ends. If rates fall before completion, you may be able to switch, depending on the lender.
- Compare a product transfer with a remortgage. Your current lender’s offer is not always the best one, so compare it with the wider market. That said, staying put can be quicker and simpler if your circumstances have changed.
- Check your loan to value. If your home has gone up in value, you may now qualify for a lower rate band. Similarly, paying down your balance can move you into a cheaper loan-to-value bracket.
- Look at the full cost. A low rate with a large fee can cost more than a slightly higher rate without one. Therefore, always compare the total cost over the fixed period, not just the headline rate.
Our guide to a fixed rate mortgage ending in 2026 explains your options in more detail.
Bank Rate and fixed rate FAQs
Will my fixed rate go up because Bank Rate has risen?
No, your rate and monthly payments stay the same until your fixed period ends. However, the rate on your next deal will depend on what lenders are charging at that point.
What are swap rates?
Swap rates are what lenders pay to fix their own funding costs over a set period. They move daily with market expectations, so they can fall even when Bank Rate rises.
Should I choose a two-year or five-year fix?
It depends on your plans, your budget and how much certainty you want over your payments. A shorter fix offers flexibility, whereas a longer fix protects you from rises for longer.
When is the next Bank of England decision?
The next decision is due on Thursday 17 December 2026, the final one of the year.
Fixed mortgage rates falling? Get advice before your deal ends
With some fixed mortgage rates falling, now is a sensible time to review your mortgage options. At Orchard Mortgage Solutions, we compare deals from a wide range of lenders, not just your current one. Moreover, we speak to lenders before applying, which matters if your income or credit is less straightforward. Find out more about our remortgage advice, or call us for a no obligation chat today.
☎️ Call us today on 01257 543013 for a no obligation chat Or use our contact form
Your home may be repossessed if you do not keep up repayments on your mortgage. This article is general information, not personal advice, and rates were correct at the time of writing.
