Bank Rate Rises to 4%: What Today's Decision Means for Your Mortgage

The Bank of England has raised Bank Rate from 3.75% to 4% today, Thursday 5 November 2026. The Monetary Policy Committee voted 8-1 in favour of a quarter-point increase, with one member preferring a larger half-point rise to 4.25%.

It is the first change of 2026 after six consecutive holds, and the first increase since 2023. If you have a tracker or variable mortgage, your payment will rise. If you are on a fixed rate, your payment does not change at all, but what happens when that fix ends matters more this morning than it did yesterday.

What the Committee decided

Bank Rate is now 4%. The vote was not unanimous, and the direction of travel in the statement was worth reading carefully.

"Monetary policy is not on a pre-set path. The Committee will continue to assess the evidence at each meeting."

The Bank also published its latest projections alongside the decision. Inflation is expected to rise towards roughly 5% in the middle of next year before falling back, as the effect of higher energy prices on the annual figure fades and restrictive policy does its work.

Why rates went up

The driver is not a booming domestic economy. It is energy.

• CPI inflation rose to 3.5% in the 12 months to September, up from 3.1% in August.
• Around 1 percentage point of that came directly from energy, mostly motor fuel.
• Brent crude averaged about $108 a barrel and UK gas about 216p a therm in the weeks before the meeting, far above the assumptions made in the summer.
• The conflict in the Middle East is now in its ninth month, and there is a genuine risk of further disruption to refining and supply.

The Committee's judgement was that while there is still limited evidence of higher energy costs feeding into wages and other prices, enough pressure is building in the pipeline to justify modestly tighter policy now. In other words, this is a rise aimed at preventing a problem rather than responding to one.

What it means if you are on a tracker or variable rate

Your payment rises, usually from your next monthly payment date or the one after, depending on your lender's rules. A quarter-point increase adds roughly:

| Mortgage size | Payment at 3.75% | Payment at 4.00% | Monthly increase | | --- | --- | --- | --- | | £150,000 | £771 | £792 | about £21 | | £200,000 | £1,028 | £1,056 | about £27 | | £250,000 | £1,285 | £1,320 | about £34 |

Those figures assume a repayment mortgage over 25 years and no change to the outstanding balance. Discount and variable rates may move by a different amount, and some lenders move their standard variable rate by less than a quarter point, so check your lender's own communication rather than assuming.

If you are on a tracker with no early repayment charge, you can usually switch to a fix without penalty. That is worth costing properly rather than reacting on the day: a fix priced for a world where Bank Rate peaks at 4.25% may still be better value than staying exposed if energy prices keep climbing.

What it means for fixed rates

Fixed-rate pricing is driven by swap rates and the market's expectation of the future path of Bank Rate, not by today's decision alone. Much of this rise was anticipated in the weeks beforehand, so do not assume fixed rates jump by 0.25% across the board tomorrow. Some lenders will reprice upwards, some will hold, and a few may use the moment to chase volume.

The practical effect is this: the cheapest fixes of the past eighteen months were built on expectations of falling rates. Those expectations have now been revised. If you were waiting for fixed rates to fall further before acting, that wait now looks less likely to be rewarded in the short term.

If you are buying

Nothing about today's decision changes what you can borrow in a structural sense, but affordability stress rates move with the market, and lenders have been gradually tightening their income multiples for anything other than straightforward PAYE cases.

What to do now:

1. Get a Decision in Principle that reflects today's pricing, not one from three months ago.
2. Build the payment at 5% or so into your budget before you commit to viewings, so a further rise is not a shock.
3. If your purchase is more than six months away, do not try to fix today. Reserve your budget and revisit when you have an offer accepted.

If your fix ends in the next six months

This is the group with the most to gain from acting early. You can usually secure a new rate up to six months before your current deal ends, and the new rate is locked in even if the market moves against you before completion. If rates fall in the meantime, most lenders will let you re-price onto a cheaper product before you complete.

If your current rate is well below 4%, expect your payment to rise regardless of what you do. The question is not whether it rises, but by how much, and whether adding fees to the loan or shortening the term is the right trade-off for you. That is a conversation worth having with figures on the table rather than in the abstract.

If you are a landlord

Tracker buy-to-let mortgages move immediately, and lenders assess affordability against the stress rate in place at application. A rise in Bank Rate tends to firm up those stress rates over the following weeks. If you are between tenancies or considering a portfolio refinance, get the numbers assessed now rather than after the next meeting.

What happens next

The next MPC announcement is on 17 December 2026. A second consecutive rise is possible but not inevitable: the Bank explicitly said policy is not on a pre-set path, and there is a real tension in the data between sticky energy-driven inflation and weak consumer activity.

Our view is straightforward. The era of assuming rates only fall has ended for now. Borrowers should plan on the basis of rates staying in the 4% region rather than betting on a rapid return to 3%. If that turns out to be too cautious, the cost is modest. If it does not, the difference is measured in hundreds of pounds a month.

Talk it through

If you would like to know what today's decision means for your own numbers, whether you are buying, remortgaging or simply unsure whether your current deal is still the right one, you can start a conversation with Matthew or message on WhatsApp. No obligation, and no pressure to fix anything you are not ready to fix.

Your home may be repossessed if you do not keep up repayments on your mortgage. Mortgage321 is an appointed representative of Ingard Financial Limited. Information correct as at 5 November 2026 and subject to change.