- Bank Rate was held at 3.75% on 17 September, but the vote was 6–3, with three members voting to raise it to 4%.
- CPI inflation rose to 3.5% in September, from 3.1% in August, driven mainly by motor fuels. The Bank expects it could top 4% in early 2027.
- Average fixed mortgage rates across the market are around 5.9–6.0%, up roughly a point on a year ago, and the average deal now stays on sale for just 13 days.
- Buy-to-let lending is still active: £10.7bn of new loans in Q2 2026, with arrears down 25.6% on a year earlier.
Where rates stand
| Average fixed rate (all mortgages) | Oct 2025 | Apr 2026 | Oct 2026 |
|---|---|---|---|
| 2-year fix | 4.98% | 5.84% | 5.93% |
| 5-year fix | 5.02% | 5.75% | 5.95% |
Source: Moneyfacts, rates as at 1 October each period. By mid-October the weekly averages were 5.96% (2-year) and 5.99% (5-year), with the 5-year average briefly touching 6% for the first time in about three years. Buy-to-let deals price above residential ones, and lower deposits cost more. The swap rates lenders use to price fixed deals have risen over the past month, so further repricing is possible.
The buy-to-let picture
- Lending: 58,051 new buy-to-let loans worth £10.7bn in Q2 2026, up about a fifth on a weak Q2 2025. Most were remortgages (39,631).
- Average new BTL rate: 4.82% in Q2, much of it fixed before the latest rises.
- Arrears and possessions: 8,390 BTL mortgages in arrears of 2.5% or more, down 25.6% on a year; possessions down 20.3% to 630.
- Average gross rental yield on new BTL loans: 7.27%.
Source: UK Finance, Q2 2026.
How lenders test affordability
Most buy-to-let lenders still want the rent to cover the mortgage interest by 125% for basic-rate taxpayers and 145% for higher-rate taxpayers, at a stressed interest rate. Under the regulator's rules, that stress rate must be at least 5.5% (or 2 points above the product rate), although fixes of five years or more can be tested at the actual rate. That's why five-year fixes often let landlords borrow more.
Tax points that affect your numbers
- Mortgage interest relief is a 20% tax credit today, expected to rise to 24% from April 2027, when property income tax rates go up by four points (Autumn Budget 2026).
- Stamp Duty on additional homes carries a 5% surcharge, plus 2% for non-UK residents.
- The Autumn Budget is on 28 October 2026, a week before the rate decision, so check both before refinancing.
Key dates
What to do now
- Note every fixed-rate end date in your portfolio, and start looking six months ahead, as many lenders let you secure a new deal that early.
- Run your numbers at 6% as well as at your current rate, to see how much headroom each property has.
- Compare a 5-year fix with a 2-year fix on affordability as well as rate, given the stress-test difference.
- Wait for 28 October and 5 November if you're about to commit, unless a good offer would expire first.
- Speak to a whole-of-market mortgage broker before your current deal ends.
Steady, predictable rent is what keeps a property comfortably above its lender's stress test. For qualifying properties, Morgan Prescott's guaranteed rent fixes your income for two to five years, so rising costs aren't compounded by empty months.
Explore guaranteed rent →Questions landlords ask
What is the Bank of England base rate now?
What are buy-to-let mortgage rates now?
What rental cover do buy-to-let lenders need?
Will interest rates go up in November 2026?
- Bank of England: Monetary Policy Summary, September 2026
- Bank of England: Bank Rate history
- Bank of England: Interest rates and Bank Rate (decision dates)
- ONS: Consumer price inflation, UK, September 2026
- Moneyfacts: UK Mortgage Trends Treasury Report, October 2026
- Mortgage Strategy: Moneyfacts weekly averages, 16 October 2026
- UK Finance BTL data, Q2 2026 (via The Intermediary)
- PRA Supervisory Statement SS13/16 (January 2026 update)
- GOV.UK: Stamp Duty on additional residential property
Next update: We'll publish the next rates briefing after the 5 November 2026 decision.
General information, not financial advice. Rules and figures change, so check GOV.UK or a qualified adviser before acting.