The Average Rate Paid on All Outstanding UK Mortgages Has Reached 4%

The average interest rate being paid across all outstanding mortgages in the UK reached 4.00% in August, up from 3.97% in July. Rates on new mortgage lending averaged 4.60%, up 0.15 in a single month. Both figures come from the Bank of England's effective interest rates release of 29 September 2026.

Bank Rate has not moved since the Monetary Policy Committee held at 3.75% on 17 September.

The existing book is still repricing

The 4.00% figure is a blended average across every mortgage still running, including fixes agreed years ago at rates nobody is being offered now. It only moves as loans reach their end dates and reprice, which is why it climbs in small monthly steps rather than jumping.

The 4.60% on new lending is what a borrower arranging finance last month actually agreed. The gap between the two is about 0.60, and that is the rough scale of the step up facing an average borrower whose fixed period ends around now.

Fewer people are buying

Approvals for house purchase fell to 54,900 in August from 55,900 in July, against a six month average of 60,100 (Bank of England Money and Credit, 29 September 2026). That is the lowest monthly figure since December 2023 as reported by Sharecast on 29 September 2026.

Remortgage approvals fell too, to 34,000 from 34,600. Net mortgage borrowing rose to £4.4 billion from £4.1 billion (Bank of England, 29 September 2026).

What it means in practice

For a landlord the number that matters is not the national average. It is your own product end dates, because each one resets the cost on that loan and puts the loan itself back through an assessment.

Maximum borrowing on a buy to let is the lower of two constraints. One is the loan to value cap applied to the current valuation. The other is what the rent supports. Which of those binds is specific to the property and changes over time.

The rate used in that rental calculation depends on the term you take. On shorter fixed rates and on variable products the rent is generally tested against a stressed rate set above the rate you pay. On five year fixes the test is typically applied at the rate actually being paid. So the same property and the same rent can support a different loan depending on the term chosen.

Rent movements cut both ways against this. Where a landlord was previously held back by rental cover rather than by loan to value, a rent rise is what creates room, and if the valuation has moved up as well there may be equity available that was not there at the last refinance. Rates have risen over the same period and work against that. Whether the net position is better or worse than two years ago depends on the property and the figures on it.

If you live overseas, the useful work here is on your own dates rather than on the market. Renewal dates across a portfolio rarely fall at convenient moments, and it is worth knowing where they sit over the next 18 months and what each one will need in documents. Gathering certified paperwork across a time difference takes longer than most people allow for.

If you have a fixed rate ending in the next year, or you want to map out where your portfolio sits when it does, get in touch and we can go through the dates and the numbers for your own situation.

Sources

• Bank of England, Effective interest rates, August 2026, published 29 September 2026
• Bank of England, Money and Credit, August 2026, published 29 September 2026
• Sharecast, Mortgage approvals tumble to near three-year low, 29 September 2026
• Bank of England, Monetary Policy Summary, 17 September 2026