UK mortgage market update July 24 2026: rates rise again, even as inflation falls
As of 22 July 2026, the average two-year fixed mortgage rate has risen to 5.57% and the average five-year fix to 5.60% (Moneyfacts), up from 5.47% and 5.49% a week earlier. This comes despite UK inflation falling to 2.6% in June, its lowest reading since March 2025. The Bank of England base rate remains at 3.75%, with the next decision due on Thursday 30 July.
If that feels contradictory, it’s the question we’ve had the most this week, and it’s worth explaining properly. Here’s what happened, why falling inflation didn’t stop rates rising, and what it means depending on your situation.
This week at a glance
| Rates rose across the board. Halifax, HSBC, Barclays, Santander, TSB, BM Solutions and Skipton all repriced upwards this week | |
| Halifax withdrew its sub-4% deals, including tracker products, a move the wider market tends to follow | |
| Inflation fell to 2.6% in the year to June, the lowest reading since March 2025, yet rates rose anyway | |
| Swap rates jumped on renewed Middle East tension and oil touching $100 a barrel, the real driver behind this week's increases | |
| Over 100 mortgage products were pulled from sale this week (Moneyfacts) | |
| Asking prices fell 1.0% this month, five times the usual July dip (Rightmove) |
Why rates rose in a week when inflation fell
This is the question worth answering properly, because it trips up a lot of people. If inflation is coming down, why did your mortgage quote just go up?
The answer is that fixed mortgage rates aren’t priced off the Bank of England base rate. They’re priced off swap rates, the wholesale cost to lenders of borrowing money for a fixed period. Swap rates move on where markets expect interest rates to go, not where inflation sits today.
This week, markets got nervous. Renewed conflict involving Iran, along with disruption around the Strait of Hormuz, pushed oil to $100 a barrel for the first time since May. Higher energy costs feed into future inflation expectations, which pushes swap rates up, and that typically feeds through into fixed mortgage rates within 24 to 48 hours. June’s 2.6% inflation figure was backward-looking. The swap market was already pricing in the months ahead.
Worth knowing: as of 22 July, markets were pricing in two base rate rises by March 2027, a significant shift from the two cuts that were expected earlier this year.
Average UK mortgage rates this week
These figures are whole-market averages across all loan-to-values. Your own rate depends on your deposit, income and circumstances, and many of our clients secure rates well below these averages.
Average mortgage rates this week
| Product | 22 Jul 2026 | 15 Jul 2026 | Change | Trend |
|---|---|---|---|---|
| Two-year fixed | 5.57% | 5.47% | +0.10% | |
| Five-year fixed | 5.60% | 5.49% | +0.11% | |
| Standard Variable Rate | 7.13% | 7.13% | No change | |
| Bank of England base rate | 3.75% | 3.75% | No change |
The lowest rates available this week
The lowest headline rate isn’t always the best overall value once fees and incentives are factored in. That calculation, weighing the rate against the fee and the term, is exactly what we do for every client rather than just reading off the best-buy tables.
Lowest rates available this week
| Borrower type | Lender | Rate | Fee | Max LTV |
|---|---|---|---|---|
| Home mover, 2-year fix | first direct | 4.32% | £490 | 60% |
| Home mover, 5-year fix | first direct | 4.38% | £490 | 60% |
| Remortgage, 2-year fix | first direct | 4.47% | £490 | 60% |
| Remortgage, 5-year fix | first direct | 4.54% | £490 | 60% |
| First-time buyer, 2-year fix | West Brom BS | 4.78% | £1,499 | 90% |
| First-time buyer, 5-year fix | first direct | 4.73% | £490 | 90% |
| First-time buyer, 5% deposit | West Brom BS | 5.15% | £499 | 95% |
Source: Moneyfacts, 22 July 2026. The lowest headline rate is not always the same as the best overall value once fees and incentives are factored in.
Which lenders moved this week
Despite all of this, competitive deals remain available. Two-year fixes around 4.3% are still on offer from Barclays, TSB and NatWest, and five-year fixes near 4.5% from HSBC and NatWest, subject to loan-to-value and criteria.
Which lenders moved this week
| Lender | Change | Direction | Effective |
|---|---|---|---|
| Halifax | Fixed rates up to 0.20%. Sub-4% deals, including trackers, withdrawn | 21 July | |
| HSBC | Increases across residential and buy-to-let fixed ranges | 21 July | |
| Barclays | Up 0.15% to 0.19%. 5-year tracker at 85% LTV moved from 4.55% to 4.75% | Week of 20 July | |
| Santander | Repriced upwards, following NatWest, Nationwide, HSBC and Halifax | 20 July | |
| TSB, Skipton & BM Solutions | All increased. BM Solutions up to 0.19% across purchase, remortgage and further advance rates | Week of 20 July | |
| Market-wide | Over 100 products withdrawn from sale, including at Market Harborough and Clydesdale | Week of 20 July |
House prices: a bigger summer dip than usual
Rightmove’s index, published Monday 20 July, showed average asking prices for newly listed homes falling 1.0%, or £3,832, to £372,359. The ten-year average for July is a 0.2% dip, so this is a notably softer month than usual.
Rightmove pointed to a mix of factors: the World Cup, three successive heatwaves each denting demand by 4 to 8%, higher mortgage rates, and the change of Prime Minister. Supply is near a twelve-year high for this time of year, which gives buyers more choice and takes away some of the urgency to compete. Regionally, London fell 1.6% and the North East 2.0%, while Yorkshire and the Humber, the North West and Wales all edged up.
The more encouraging detail: sales agreed in the first half of 2026 were level with the same period in 2024, and 74% of homes sold without needing a price reduction. Buyers are still transacting. They’re simply being more selective on price.
What to watch next week
What to watch next week
| Tuesday 28 July, the FCA's mortgage rule review consultation (CP26/18) closes, with proposals aimed at widening access for first-time buyers, self-employed and later-life borrowers | |
| Thursday 30 July, the Bank of England's next base rate decision, alongside a new Monetary Policy Report. A hold at 3.75% is the central expectation, though June's vote was 7 to 2, with two members backing a rise | |
| Wednesday 19 August, July's inflation figures land from the ONS | |
| Ongoing, swap rate movements. If two and five-year swaps settle back below 4%, expect lenders to start trimming fixed rates again. If oil stays elevated, expect further increases |
What this means for you
If your current deal ends within the next six months, this is the week to act. You can typically secure a rate up to six months ahead of completion, and if better rates appear before you complete, we can switch you onto them. That protects you if rates keep climbing, and costs you nothing if they fall.
If you’re already on your lender’s standard variable rate, the gap is now stark: 7.13% on the average SVR against 5.57% on the average two-year fix. On a typical mortgage, that difference adds up every single month.
And if you’ve been holding out for cheaper rates, it’s an understandable instinct, but the evidence of the last fortnight is that waiting has cost borrowers money rather than saved it.
Frequently asked questions this week
Are UK mortgage rates going up or down right now?
Up. As of 24 July 2026, average fixed mortgage rates have risen for two consecutive weeks. The average two-year fix stands at 5.57% and the five-year at 5.60% (Moneyfacts, 22 July 2026), after more than a dozen major lenders repriced upwards.
What is the UK base rate in July 2026?
The Bank of England base rate is 3.75%. It was held at that level on 18 June 2026 by a 7 to 2 vote. The next decision is on 30 July 2026.
Why did mortgage rates rise when inflation fell?
Fixed mortgage rates track swap rates, which reflect expectations of future interest rates rather than current inflation. Renewed Middle East tension and oil at $100 a barrel pushed swap rates higher this week, so lenders repriced upwards despite June inflation falling to 2.6%.
Should I lock in a mortgage rate now?
If your deal ends within six months, securing a rate now protects you against further increases, and most lenders let you move to a lower rate if one becomes available before completion. The right answer depends on your circumstances, so it's worth speaking to an adviser.
This article is for information only and does not constitute financial advice. Rates quoted are accurate as at the dates stated and are subject to change or withdrawal without notice. Sources: Moneyfacts, Office for National Statistics, Bank of England, Rightmove, Chatham Financial, and UK mortgage trade press published 20 to 24 July 2026. Your home may be repossessed if you do not keep up repayments on your mortgage.
Reviewed by Brennan Goodwin, CeMAP-qualified mortgage adviser at Heron Financial. Last updated: 24 July 2026.