Last edition was a short one, written the day before the Bank of England's September decision. Now that the decision is in, it is worth going further than "rates held again", because the vote itself, and what is driving it, tells you more about the next year than the headline does. This edition leads with one story, worked through properly, rather than three shorter ones, because it is the one that actually matters if you have a mortgage decision coming up.
🏦 The vote that matters more than the hold Confirmed
On Thursday 17 September the Bank of England held Bank Rate at 3.75% for the sixth month running. Almost nobody expected otherwise. What is more telling is how the nine-member Monetary Policy Committee split: six members voted to hold, but three, Megan Greene, Catherine Mann and Huw Pill, voted to raise Bank Rate straight to 4%. That is the strongest push for an immediate rise since the current run of holds began, and it is a real shift from a Committee that spent most of the year debating how much slack there is in the economy, not whether to tighten it further.
The reason sits well outside Threadneedle Street. According to the Bank's own minutes, the continuing conflict in the Middle East had pushed Brent crude to $106 a barrel and UK wholesale gas to 207 pence a therm by 14 September, up 36% and 78% respectively since the period before the Bank's July forecast round. The Bank's own mechanical projection, built from current energy prices, now has UK inflation reaching just over 4% in early 2027, close to double its 2% target, and it said the risks to that outlook are tilted further to the upside than they were in July.
This is already visible in the official inflation figures. The ONS confirmed on 16 September that CPI inflation rose to 3.1% in the year to August, up from 2.9% in July, with transport costs, and motor fuel in particular, the largest single contributor. Motor fuel prices alone were up 23.0% on the year.
📊 What forecasters now expect through 2027
This is the part worth reading properly, because it changes the calculation for anyone weighing up whether to fix now or wait. Rachel Springall, finance expert at Moneyfactscompare, whose rate tracking lenders and brokers rely on, said this week that economists widely expected the September hold, and now expect a quarter-point rise at the Bank's next meeting on 5 November, which lands alongside a full updated Monetary Policy Report. She also pointed to speculation that four of the five rate decisions between February and July 2027 could be rises too, a cumulative 1.25 percentage points that would take Bank Rate from 3.75% to 5% if it all plays out.
It is worth being honest about what that is: informed speculation about a possible path, not a promise. As recently as July, the working assumption in the market was a hold through most of 2027, before the Middle East conflict escalated again and changed the picture within weeks. The point is not that a 5% Bank Rate is now certain, it almost certainly is not. The point is that the direction of travel has reversed, from "rates are on their way down" to "rates may go up again before they come down", and lenders are already pricing that shift in rather than waiting to see if it happens.
💷 What it is already costing you Confirmed
Moneyfacts data shows the average two-year fixed mortgage rate has risen from 4.84% at the start of March to 5.73% now, a jump of 0.89 percentage points in six months. Its broader Average New Mortgage Rate (covering all fixed and variable new deals) stands at 5.68%, up from 5.59% at the start of August and 4.90% at the start of March. On a £250,000 mortgage over 25 years, that six-month move alone adds roughly £131 a month, or £1,572 a year, to what a new borrower pays compared with March.
NatWest, Santander, HSBC, Lloyds and TSB have all repriced upward twice since the start of September, and several building societies, including Nationwide, have followed. Springall put the underlying cause plainly: swap rates, the wholesale rates fixed mortgages are actually priced from, have climbed above 4.70%, and fixed rates move with swaps, not with Bank Rate directly. A base rate hold does not undo that.
The group most exposed: the Bank of England estimates that around 750,000 households with a fixed deal ending in 2026 are currently paying a rate below 3%. Rates that low have not been generally available since around February 2022. For this group, moving onto whatever is on offer now will be a genuine jump, whichever way rates go from here, and it is worth budgeting for that properly rather than being caught out by it.
💡 What it means for you
- Deal ending in the next six to twelve months? The timing of a remortgage and a product transfer is not the same, and it is worth understanding both routes. A remortgage to a new lender can usually be arranged and secured up to about six months before your current deal ends, with the offer normally holding for that period, so you can lock in a rate now and still switch to something cheaper later if the market turns. A product transfer, staying with your current lender, usually cannot be booked that early, most lenders have narrowed that window to three or four months. Getting a remortgage quote now, even if you expect to stay put, costs nothing and keeps your options open. Our product transfer vs remortgage guide compares the two routes in full.
- On a fixed deal below 3% ending this year? Do the sums now rather than when the renewal letter arrives. What happens when your fixed rate ends walks through what a jump from a sub-3% deal to current rates actually looks like on a typical mortgage, and what your options are.
- On a tracker or standard variable rate? Thursday's hold means no change this month, but you are the group most directly exposed if the Bank does raise rates in November, because tracker and SVR payments move with Bank Rate immediately, unlike fixed rates. If you are on an SVR by accident rather than choice, what SVR actually costs is worth five minutes.
- Buying a home? The Autumn Budget lands on 28 October, before the Bank's next decision, and the Bank itself has noted the Budget as a factor in this month's thinking. Get your agreement in principle in place, and build a little room into your budget for the rate to move between offer and completion.
🛡️ Could your mortgage still get paid if you were seriously ill?
With mortgage costs climbing again for anyone renewing, it is a good moment to check a different kind of exposure: what happens to your household budget if a serious illness stopped you working, not for a week or two, but for months. Critical Illness Cover pays a tax-free lump sum on diagnosis of a defined list of serious conditions, typically including heart attack, stroke, cancer, multiple sclerosis, kidney failure and major organ transplants (you usually need to survive 14 to 28 days after diagnosis for a claim to pay out). Used sensibly, that lump sum clears the mortgage, or a large chunk of it, at the exact moment your income is most at risk.
It is not cheap compared with life insurance on its own, because the chance of a serious illness claim is materially higher than the chance of a death claim over the same period. As a rough guide, a 35-year-old non-smoker taking £200,000 of life cover alone might pay around £10 a month, while combining life cover with Critical Illness Cover on the same sum could run to £30 to £40 a month. Whether that is worth it depends on your health, your dependants and what savings buffer you already have, which is exactly the kind of conversation worth having with someone regulated rather than guessing.
Our life insurance vs Critical Illness Cover guide sets out what each actually pays out for and how to combine them sensibly, and the wider protection hub covers income protection and family cover too. If you would like it costed properly for your own mortgage and circumstances, Debbie at DS Financial can talk it through with you, no pressure, and no obligation to buy anything.
That is the fuller picture. The next scheduled Bank of England decision is 5 November, alongside a full updated forecast, and the Autumn Budget lands on 28 October before that. Both are genuine events worth watching rather than noise, and we will cover what they change when they happen. If anything here raises a question about your own mortgage, drop us a line, or have a no-pressure chat with Debbie at DS Financial.
General information, not financial, tax or legal advice. Figures correct at the time of writing (18 September 2026) and may change quickly given current market conditions. Mortgage rate figures are market averages and illustrative only, subject to lender criteria and change. Protection insurance premium examples are illustrative only and will vary by insurer, health and circumstances. Your home may be repossessed if you do not keep up repayments on your mortgage.
Sources: Bank of England, Monetary Policy Summary and Minutes, September 2026 (17 September 2026), ONS, Consumer price inflation UK, August 2026 (16 September 2026), The Intermediary, "Major lenders hike rates for a second time this month ahead of BBR decision, Moneyfacts" (15 September 2026), Moneyfactscompare, "BoE Holds Interest Rates at 3.75%" (17 September 2026), Bank of England, upcoming MPC dates, Ofgem, energy price cap announcement, October 2026 (26 August 2026).