It’s a small move—not a reason to panic—but it’s worth knowing what’s going on and how to play it smart if you’re remortgaging or buying soon.
What actually changed?
Lenders have shaved a few basis points upward on some fixed deals. Think of it as a tiny nudge rather than a spike. These tweaks often happen when lenders’ own costs (like swap rates/funding costs) move, or when they rebalance how competitive they want to be.
How much does a tiny rate rise cost?
A handy rule of thumb for a 25-year repayment mortgage:
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+0.02% on the interest rate ≈ £1–£1.50 extra per month for every £100,000 borrowed
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+0.10% (ten basis points) ≈ £6 extra per month per £100,000
Examples (approx.):
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£150,000 loan:
• +0.02% ≈ £2/month more
• +0.10% ≈ £9/month more -
£300,000 loan:
• +0.02% ≈ £3–£4/month more
• +0.10% ≈ £18/month more
So yes, rates edged up—but on a monthly basis, the difference is usually coffee-money small. The bigger story is the direction (up a touch instead of down), not the size of the move.
Why are lenders nudging rates up?
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Funding costs: Lenders price fixed deals using financial markets (e.g., “swaps”). When those move up, fixed rates usually follow.
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Risk and capacity: If a lender gets swamped with applications, it may raise rates slightly to manage service levels.
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Competition: Pricing is a moving target. When one big lender adjusts, others often follow—or hold—to stay competitive.
What should you do?
If your fixed deal ends in the next 6–9 months
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Start early. Most lenders/brokers let you secure a new rate up to 6 months in advance. If rates drop later, you can usually switch to the lower rate before completion.
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Compare two routes:
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Product transfer with your current lender (fast, light paperwork).
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Whole-of-market remortgage (may find a cheaper overall deal).
Ask for the total cost over the fixed term (rate + fees − incentives), not just the headline rate.
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If you’re on a tracker or SVR
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Your payment moves with base rate or with your lender’s standard rate. This week’s small fixed-rate changes don’t automatically change your payment, but they are a reminder to stress-test your budget and explore fixing if you want certainty.
First-time buyers
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A small uptick doesn’t change the fundamentals. Focus on LTV bands (e.g., 90%, 85%, 75%): dropping into a lower LTV often beats chasing tiny rate differences. Save for costs and fees, and compare deals on true cost, not just APR.
Choosing 2-year vs 5-year fixes
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5-year fix: More stability and usually a lower monthly payment volatility. Good if you want to “set and forget.”
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2-year fix: More flexibility to re-price sooner if rates fall—but you’ll face fees again sooner and you’re more exposed if rates rise.