Mortgage Rates Are Rising Again in August — Here's Why the June Dip Didn't Last

If you've been waiting for mortgage rates to keep falling before locking in a new deal, the last two months have been a frustrating ride. Rates fell sharply during June 2026, giving hope that the worst of the recent rate cycle was behind us — but average mortgage rates have started edging back up again in August 2026 as lenders reprice their fixed-rate products upward.

What's actually on offer right now

As of early August 2026, the best no-fee 5-year fixed rate is 4.74% from Nationwide, while the best no-fee 2-year fixed sits at 4.86%, also from Nationwide. Nationwide's best no-fee 10-year fix is 5.29%, and for those remortgaging onto a 10-year deal, Santander's 4.91% rate is currently competitive. At the other end of the scale, anyone who lets their fixed deal lapse onto their lender's standard variable rate is now paying an average of just below 7.35% — roughly 2.5 percentage points above the best fixed alternatives.

Why rates went back up

The Bank of England held the base rate at 3.75% on 30 July 2026, the fifth consecutive hold, which on its own doesn't explain why fixed mortgage rates are climbing — fixed-rate pricing is driven mainly by swap rates and gilt yields, which reflect where markets expect the Bank Rate to be over the next two to ten years, not where it sits today. When gilt yields rise — often on inflation concerns, government borrowing costs, or shifting expectations about the pace of future rate cuts — lenders quickly reprice their fixed products upward to protect their margins, even without any change to the Bank Rate itself. That's the pattern behind June's brief dip followed by August's renewed climb: swap-rate volatility, not the headline Bank Rate, is doing most of the work.

Should you lock in now or wait?

There's no universally right answer, but a few principles help:

• If your current deal ends within the next six months, most lenders let you lock in a new rate 3–6 months ahead of your renewal date, and many allow you to switch to a cheaper rate if one becomes available before completion — so locking in early rarely costs you the chance of a better deal later.
• If you're on your lender's standard variable rate right now, the gap between SVR (~7.35%) and the best fixes (under 5%) is large enough that switching almost always pays for itself quickly, even after any early exit or arrangement fees.
• If you're remortgaging and genuinely unsure which way rates will move, a shorter fix (2 years) gives you more flexibility to reassess sooner, while a longer fix (5 or 10 years) trades that flexibility for payment certainty.

Checklist before you remortgage

• Check your current deal's end date and diarise a reminder 6 months ahead.
• Get an up-to-date mortgage in principle so you know what you can borrow at today's rates.
• Compare whole-of-market rates via a broker or comparison site rather than only your existing lender's retention offers.
• Factor in arrangement fees — a lower headline rate with a large fee isn't always the cheapest overall deal.
• If you're on an SVR, run the maths on switching now rather than waiting, given the size of the current gap.

How this compares internationally

The UK's reliance on 2- and 5-year fixed-rate deals that require regular remortgaging is unusual — in the US, 30-year fixed-rate mortgages are the norm, locking in a rate for the life of the loan, while several European countries also favour longer fixes of 10, 15, or even 20 years. That structural difference means UK borrowers are more exposed to exactly this kind of short-term rate volatility than homeowners in many other developed economies.

Key Numbers

• Best no-fee 5-year fixed: 4.74% (Nationwide)
• Best no-fee 2-year fixed: 4.86% (Nationwide)
• Average standard variable rate: just below 7.35%
• Bank Rate: held at 3.75% since 30 July 2026

Sources

• What are the current UK mortgage rates today? — Uswitch
• Best Mortgage Rates — HomeOwners Alliance
• Mortgage Rate Predictions 2026 — HomeOwners Alliance
• Consumer Financial Protection Bureau — US mortgage basics

Educational content only — not financial advice.