Residential Mortgage Rates 2026 — Updated August 2026
- Best 2yr fix — Danske Bank (fees £1,124, Aug 2026)
- 4.33%Best 2yr fix — Danske Bank (fees £1,124, Aug 2026)
- Best 5yr fix — Barclays (fees £1,004, Aug 2026)
- 4.48%Best 5yr fix — Barclays (fees £1,004, Aug 2026)
- BoE base rate (held 30 July 2026)
- 3.75%BoE base rate (held 30 July 2026)
- Last updated
- August 2026Last updated
UK residential mortgage rates in 2026 range from 4.33% for the best 2-year fix (Danske Bank, 60% LTV, August 2026) to above 6% for high-LTV or complex income cases. The overall range across the market is 3.9%–6.4%. The Bank of England held the base rate at 3.75% on 30 July 2026, with further cuts expected in September and November. This guide covers current rates by fix term and LTV, what affects your rate, and how the rate outlook looks through the rest of 2026.
Residential Mortgage Rates by Fix Term and LTV — August 2026
Swipe the table sideways to see every column.
| Product | LTV | Best rate (indicative) | Average range |
|---|---|---|---|
| 2yr fixed — purchase | 60% LTV | 4.33% (Danske Bank) | 4.33%–4.9% |
| 2yr fixed — purchase | 75% LTV | ~4.5%–4.8% | 4.5%–5.1% |
| 2yr fixed — purchase | 85% LTV | ~4.8%–5.3% | 4.8%–5.6% |
| 2yr fixed — purchase | 90% LTV | ~5.0%–5.6% | 5.0%–6.0% |
| 2yr fixed — purchase | 95% LTV | ~5.3%–6.0% | 5.3%–6.4% |
| 3yr fixed — purchase | 60%–75% LTV | 4.46% (Halifax) | 4.46%–5.2% |
| 5yr fixed — purchase | 60% LTV | 4.48% (Barclays) | 4.48%–5.0% |
| 5yr fixed — purchase | 75%–85% LTV | ~4.7%–5.3% | 4.7%–5.8% |
| 2yr tracker (variable) | 60% LTV | BoE+0.75%–1.5% (approx 4.5%–5.25%) | Variable |
| Complex income / self-employed | 65%–75% LTV | Typically +0.1%–0.5% above standard | Specialist lender range |
| Later life / retirement mortgage | 60%–75% LTV | 4.5%–6.0% (specialist lenders) | Specialist range |
What determines your rate
LTV
The biggest single rate driver. Moving from 85% to 75% LTV typically saves 0.3%–0.5% on the rate. If you can raise your deposit by 5%–10%, the rate saving over a 2 or 5-year fix often exceeds the cost of finding the additional deposit.
Fix term
2-year fixes are currently pricing close to (and in some cases below) 5-year fixes — the market expects rates to fall. 2-year fixes offer lower initial costs but expose you to rate risk at renewal. 5-year fixes provide payment certainty but lock you into the current rate if rates fall further.
Income type
Standard PAYE income attracts the widest lender pool and sharpest rates. Self-employed, contract, variable, and overseas income all require specialist lenders or specialist treatment and typically add 0.1%–0.5% to the effective rate.
Credit history
Perfect credit accesses all products. County court judgements, defaults, or missed payments within the past 3–6 years restrict the lender pool to specialist and adverse credit lenders, which price at a significant premium.
Arrangement fee
Low rates often come with high arrangement fees (£999–£1,999). A rate of 4.33% with a £1,124 fee may cost more overall than 4.45% with no fee on a smaller loan. Always compare the total cost — monthly payment × term + arrangement fee — not the rate alone.
Property type
Standard freehold or long-leasehold property attracts all lenders. Short leasehold (under 85 years), non-standard construction, and unusual property types narrow the field and may push rates up.
Worked cost example
- Rate A
- 4.60% with £999 arrangement fee
- Rate B
- 4.85% with no arrangement fee
Scenario: £300,000 residential mortgage on a £400,000 property (75% LTV). 5-year fix.
Rate A: Monthly payment £1,572. Total cost over 5yr term: £95,320 (interest £94,321 + fee £999)
Rate B: Monthly payment £1,622. Total cost over 5yr term: £97,320 (interest only)
Result: Rate A saves £2,000 over 5 years — the arrangement fee is recovered in approximately 20 months.
On smaller mortgages (under £100,000), the arrangement fee becomes proportionally more significant — sometimes making the no-fee option better value.
Rate context and outlook
The best residential mortgage rates as of 18 August 2026 show continued gradual improvement from the peak of 2023. The Bank of England held base rate at 3.75% on 30 July 2026. Most market analysts expect cuts at the September and November 2026 MPC meetings, which should continue to put downward pressure on fixed mortgage rates through H2 2026. Swap rates — which drive fixed mortgage pricing more directly than the base rate — have been falling gradually. Nationwide cut fixed rates by up to 19bps in the week ending 7 August 2026, with the lowest rate falling to 4.52% on a 2-year fix at 60% LTV.
Frequently asked questions
Will mortgage rates go down in 2026?
Most analysts expect UK mortgage rates to continue falling gradually through 2026, with the Bank of England expected to cut the base rate at its September and November 2026 meetings. However, swap rate volatility means individual lender rates can move independently of BoE decisions. A rate that is attractive today should not be left unactioned in the expectation of a significantly lower rate in 3 months.
Should I take a 2-year or 5-year fixed mortgage in 2026?
In August 2026, 2-year fixed rates are pricing close to or below 5-year rates for many lenders — the inverted yield curve reflects market expectations of rate falls. If you are confident rates will fall further and you are comfortable with the remortgage cost and uncertainty in 2028, a 2-year fix makes sense. If you value payment certainty and may need to sell within 5 years (check the early repayment charges), the 5-year fix provides stability.
What is the best mortgage rate available in August 2026?
The best 2-year fixed purchase rate as of 18 August 2026 is 4.33% from Danske Bank (fees £1,124, 60% LTV). The best 5-year fixed purchase rate is 4.48% from Barclays (fees £1,004, 60% LTV). These are best-buy rates — the rate you receive depends on your LTV, income, credit profile, and property. A whole-of-market broker comparison will identify the best rate for your specific circumstances.
I am self-employed — will I pay a higher mortgage rate?
Not necessarily on the rate itself, but the lender pool is smaller and some specialist lenders price slightly higher for self-employed income. Most mainstream lenders accept self-employed applicants with 2 years of accounts or SA302 tax calculations. Specialist lenders can work with 1 year of accounts or complex income structures. The rate is often comparable to standard employed rates — the difference is in the documentation requirements and lender selection.
What is a tracker mortgage and when does it make sense?
A tracker mortgage follows a reference rate (usually the BoE base rate) plus a margin — for example, base rate + 1.0% = currently 4.75%. Trackers have no fixed term and typically have no early repayment charges, meaning you can switch to a fixed rate at any time without penalty. Trackers make sense if you expect significant rate falls in the near term and want flexibility — you benefit immediately when the base rate cuts rather than waiting for a fixed term to expire.
Get a personalised rate comparison for your case
Independent whole-of-market advice · FCA No. 814533