Why did mortgage rates go up again in July?

2 minute read

Mortgage rates have been confusing to follow lately. After falling through the spring, they had a small peak in July, even though the Bank of England's base rate has now stayed the same for five consecutive meetings (as of 31/07/26). So why are so many lenders putting their prices up?

Why lenders are hiking their rates

The main reason many lenders have increased their pricing is global volatility in the Middle East. Mortgage rates are closely linked to swap rates, lender funding costs and the wider economic outlook, so events far beyond the UK's borders can still push your monthly payments up or down.

This doesn't mean rates are about to skyrocket. The Bank of England held the base rate at 3.75% at its most recent meeting on 30 July 2026, the fifth hold in a row. However, the vote was closer than it looks on the surface: three of the nine Monetary Policy Committee members voted to raise the rate to 4%, up from two the previous month. Inflation has fallen faster than expected to 2.6%, but the Bank has warned that energy prices remain high and volatile because of the ongoing conflict in the Middle East, and that this could push inflation back up later in the year.

This is the key point for borrowers: lenders often price their fixed deals based on where they expect rates to go, not just where they are today. So a cautious Bank of England, combined with continued uncertainty overseas, is enough to nudge fixed rates upward even without a change to the base rate itself.

What this means if you're remortgaging or buying

Rates can move between when you apply for a mortgage and when you receive your formal offer, so it's important to keep an eye on the market right up until your offer is issued to make sure you're still getting the best possible deal.

If you're remortgaging, you don't need to wait until your current deal ends to act. Most lenders let you lock in a new rate up to six months in advance, which means you can secure a deal now and switch to something cheaper later if rates fall before your new deal starts. If you're buying, the same principle applies: securing a deal early gives you protection against further rate rises, while still leaving room to review your options if the market improves before you complete.

With so much uncertainty overseas and predictions for the rest of the year ranging widely, this isn't a market to try to second guess alone.

Speak to Hello Mortgage. Our whole-of-market brokers monitor rate movements daily to find the best deal for you, whether you're buying your first home, moving, or remortgaging.

Tel: 0800 292 2557

Email: hello@hellomortgage.co.uk