Rate Rise Adds About £31 a Month on £200,000; Leaving 1.58% About £460
For borrowers on variable rates, Thursday's expected Bank Rate rise is a small bill. The larger one belongs to the million-odd households whose cheap five-year fixes are ending.
Two homeowners owe the same £200,000. One is on a variable rate, and an expected quarter-point rise on Thursday costs about £31 more a month. The other's five-year fix at 1.58% ends, and the new deal costs about £460 more.
Both are illustrations, not real people, but the gap between them is real: roughly 15 times. For the minority of borrowers who are not on a fixed rate, the Bank of England's decision is a small bill. For everyone else it is a pricing event that has already happened, because lenders moved fixed rates before the vote. The money is in the refix, which just means switching to a new fixed deal when the old one runs out.
On Thursday, Nov. 5, the Bank's Monetary Policy Committee (MPC) is due to decide whether to lift Bank Rate from 3.75% to 4%, which would be the first rise in more than three years. In a Reuters poll of Oct. 12-14, 54 of 63 economists expected a 25 basis point rise (a basis point is one hundredth of a percentage point, so 25 is a quarter-point). A month earlier, about 90% had expected rates to stay on hold for the rest of the year.
What changed was inflation. The Office for National Statistics reported on Oct. 21 that consumer prices rose 3.5% in the 12 months to September, up from 3.1% the month before, with motor fuel prices up 29.8% over the year. Our earlier report on May inflation put it at 2.8%; four months on, it is well above that. By Oct. 29, Trading Economics reported, money markets were "fully pricing in a rate hike on November 5."
A quarter-point is about £31 a month on £200,000
Start with the variable-rate borrower. The table below takes a repayment mortgage with 25 years left and moves the rate from 5.98% to 6.23%. The 5.98% is the average two-year fixed rate Moneyfacts reported on Oct. 5, used as a stand-in for a tracker rate.
| Balance | At 5.98% | At 6.23% | Extra a month | Extra a year |
|---|---|---|---|---|
| £150,000 | £965 | £988 | £23 | £276 |
| £200,000 | £1,286 | £1,317 | £31 | £369 |
| £250,000 | £1,608 | £1,646 | £38 | £461 |
The method: a standard repayment (capital and interest) mortgage, with the monthly payment equal to the balance times i, divided by 1 minus (1 + i) to the power of minus n. Here i is the annual rate divided by 12 and n is the months remaining. Fees and arrangement costs are left out, and figures are rounded to the pound. Differences are calculated on unrounded figures, so they can differ by £1 from the gap between the rounded payments shown.
The answer barely depends on where you start. Begin anywhere from 4% up to the 7.13% average standard variable rate (the default rate a lender charges when a deal ends) and the extra payment on £200,000 stays between £28 and £32 a month. On £150,000 it runs £21 to £24, and on £250,000 it runs £35 to £40.
That is about £1 a day on the middle balance. Worth budgeting for, but not a shock. It also lands on a minority. HM Treasury said in March that 86% of mortgages are on fixed rates, which leaves 14% on trackers, standard variable rates and other products. The sources do not say how many of those are trackers.
The refix is where the money goes
Now the second homeowner. Assume the same £200,000 balance, five years into a 25-year term, so 20 years left. The old deal was a five-year fix at 1.58%; the new one is a five-year fix at 6.00%, the average Moneyfacts recorded on Oct. 5, the first time in roughly three years it had touched that level.
| Balance | At 1.58% | At 6.00% | Extra a month | Extra a year |
|---|---|---|---|---|
| £150,000 | £729 | £1,075 | £345.30 | £4,144 |
| £200,000 | £972 | £1,433 | £460.39 | £5,525 |
| £250,000 | £1,216 | £1,791 | £575.49 | £6,906 |
The 1.58% is not arbitrary. Mortgage Solutions reported on March 27 that around one million of the 1.6 million fixed deals due to end this year are five-year deals secured when average rates were 1.58%. The 1.6 million comes from the Treasury's March 26 announcement. Rachel Springall, finance expert at Moneyfactscompare.co.uk, has said that moving off sub-2% deals "will be a huge shock for borrowers."
The Bank's own Financial Stability Report, as Mortgage Solutions reported on July 7, put about 750,000 households paying under 3% on course to come off fixed rates in 2026, with repayments rising £170 a month on average. That is smaller than £460, partly because those households' old rates were higher than 1.58% and the report predates the autumn rise in fixed rates, but it points the same way.
Why did pricing move before the vote? Bank Rate is not what sets a fixed rate.
Fixed rates "are not intrinsically linked to adjustments to the Bank of England Base Rate (BBR)."
Rachel Springall, finance expert, Moneyfactscompare.co.uk
Lenders price fixes off swap rates, the market's price for locking in borrowing costs, and off what they expect the Bank to do. By mid-September, Mortgage Professional reported on Sept. 16, swap rates above 4.70% and the ten-year gilt yield above 5.25%, the highest since August 2007.
The average two-year fixed rate rose from 4.84% in March to 5.73% by mid-September, then to 5.98% on Oct. 5. On £200,000 over 25 years, that is £1,151 a month becoming £1,286, an extra £136 or so before the Bank has voted. Between the start of September and Oct. 5, the number of sub-5% fixed deals (excluding Northern Ireland-only products) fell from 1,494 to nine. "The impact on sub-5% fixed mortgages has been brutal," Springall said on Oct. 5.
Borrowers are not waiting. The Bank of England's mortgage data, published Oct. 29, show remortgaging approvals of 42,600 in September, up from 34,000 in August, a rise of 25% before the vote. Approvals are not the same as expiries, so that is not a count of everyone refixing.
The practical points come from the Treasury's own announcement. Borrowers can book a new rate up to six months ahead, lenders committed to contact customers whose deals are ending, and a temporary interest-only option runs for six months. "In uncertain times, people need clear reassurance and practical help," Chancellor Rachel Reeves said.
So the useful question on Thursday is less whether Bank Rate rose than what your lender would quote if your deal ended today, and how that compares with a rate booked now. Fixes move on expectations, not on the headline. A borrower may wish to speak to a qualified adviser before choosing.
What the vote can still change
The Committee has turned a long way in under a year. In December 2025 it voted 5-4 to cut Bank Rate to 3.75%, with Megan Greene, Clare Lombardelli, Catherine Mann and Huw Pill preferring to hold at 4%. In February it voted 5-4 to hold, with four members wanting a cut to 3.5%. March brought a unanimous 9-0 hold.
Then the other direction opened up. In April, Pill alone voted for a rise. In June, Greene joined him; in July, Mann did too, and the same three dissented again in the Bank's September summary, a 6-3 hold on Sept. 17. For a rise to pass, at least two of the six who held then would have to move: Andrew Bailey, Sarah Breeden, Swati Dhingra, Lombardelli, Dave Ramsden and Alan Taylor.
The Committee said it "stands ready to act as necessary to ensure that CPI inflation remains on track" for its 2% target, judging risks to inflation tilted to the upside, more so than in July. It projected inflation at about 3¾% in the fourth quarter of 2026 and slightly above 4% in the first quarter of 2027.
Pill has two faces here. In a Sept. 7 speech, the Bank's chief economist said a 25 basis point rise to 4% would send a "clear and unambiguous signal" on inflation risks, and that delay risked a "bias to the status quo." Yet Reuters reported on Oct. 15 that he has pushed back against market expectations for a series of hikes. One move, in other words, but not necessarily a campaign.
Markets are less restrained than Pill. The Reuters report said they were fully pricing four quarter-point rises by the end of 2027, as of Oct. 15, while the economists it polled were not: no majority expected a rise after November, though 30 of 61 expected one more in the first quarter of 2027. By Oct. 30, Trading Economics said, markets expected further increases in February and July, with a 50% chance of another by December 2027.
Sonali Punhani of Bank of America told Reuters: "The bigger pickup in inflation is still ahead of us rather than behind us." Dani Stoilova of BNP Paribas said: "The conditions are now moving to a place where that rate hike will need to be delivered."
None of this means the Bank is irrelevant to fixed pricing. Swap rates and expectations drive fixes, so a hawkish or dovish tone on Thursday could still move them. The sources do not say which way. Thursday is also a Monetary Policy Report meeting, and the next announcements are Dec. 17 and Feb. 4, 2027, with the next ONS inflation reading due Nov. 18.
The arithmetic of the market's path is the sobering part. If four quarter-points do arrive by the end of 2027, a full point on a variable loan at 5.98% would add £94 a month on £150,000, £125 on £200,000 and £156 on £250,000. That £125 is roughly a quarter of the £460 the refix already costs.
