Rates Up to 4%: A Two Minute Guide for Homeowners
In this two minute read, we cover what last weeks Bank of England decision means for your home, and the dates that matter from here, including the ones the Budget has added.
What happened last week?
The Bank of England raised Bank Rate by a quarter of a percentage point, from 3.75% to 4%, on a vote of 8 to 1. It is the first rise since August 2023. Bank Rate was last at 4% between August and December 2025.
The reason is energy. CPI inflation was 3.5% in the twelve months to September 2026 (ONS), and the Bank expects it to rise to around 5% by the middle of 2027 before falling as the effect of energy prices fades.
Does it change my mortgage?
Fixed rate. No. Your payment stays the same until your deal ends. In the second quarter of 2026, 90% of outstanding homeowner mortgage balances were on fixed rates (FCA data).
Tracker. Yes, it follows Bank Rate. Your lender will write to tell you the new payment and when it starts.
Standard variable rate. Your lender decides how much to pass on, so read the letter.
Fix ending on or before May 2027? Speak to a broker now rather than in the final weeks.
Where does the Budget fit in?
Helpfully. In its minutes today, the Bank says the Budget's new measures are expected to lower CPI inflation by a quarter of a percentage point by the second quarter of 2027. That pulls in the same direction as the Bank.
Which dates should be in my diary?
28 October 2026, already in place. The Lifetime ISA withdrawal charge fell to 20%, so first-time buyers buying above the £450,000 cap are no longer penalised.
17 December 2026. The Bank of England's next Bank Rate decision.
By the end of December 2026. Pre-registration opens for Your First Home, the new-build equity loan scheme in England with a 2.5% deposit and loans of up to 20%.
January 2027. A £100 Household Energy Payment for up to 20 million homes in council tax bands A to D in England, through the council tax system.
February 2027. Full applications open for Your First Home.
April 2027. The first Your First Home loans. Around £50 off the Ofgem price cap from the extended VAT cut. Tax rates on savings and property income rise by a further two percentage points across all bands, which matters to landlords.
1 July 2027. The extended VAT cut on electricity runs until this date.
What if I rent?
A rate rise does not entitle anyone to raise your rent. In England, your landlord can only increase the rent once a year, with at least two months' notice on Form 4A, and you can challenge it at the First-tier Tribunal (GOV.UK).
Frequently asked questions
Will my fixed rate go up?
No. It stays the same until your deal ends.
Is this the start of lots of rate rises?
The Bank of England says monetary policy is not on a pre-set path. It decides meeting by meeting, and the next decision is on 17 December 2026.
When can I apply for Your First Home?
Pre-registration opens by the end of December 2026 and full applications from February 2027. It is for new-build homes in England from developers signed up to the scheme.
If you want to talk through what today means for your own plans, give us a call. Sometimes the honest answer is that it changes nothing for you, and we would rather say so.
A note on how settled all this is. Everything above reflects the position published on 5 November 2026. The Bank of England decides Bank Rate meeting by meeting, so nothing here is a forecast. Several Budget measures, including Your First Home and the new First Time Buyer ISA, still need detailed guidance before every rule is known, and dates and eligibility can change before a measure takes effect. Please check the current position on GOV.UK, or with your lender or a qualified adviser, before you make a decision based on it.
This article is for general information only and does not constitute financial or legal advice. Mortgage decisions depend on your own circumstances, so always speak to a qualified adviser before you act.
If you know a homeowner or first-time buyer worried by today's headlines, please pass this on.
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