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UK banks compete for mortgage business ahead of expected interest rate rise
UK lenders battle for mortgage market share as the Bank of England looks set to raise interest rates
Key points
- The Bank of England is expected to raise its base rate to 4 per cent on Thursday, its first hike in three years.
- UK Finance says 2.3m households will reach the end of fixed-rate mortgage deals in 2027.
- Remortgages rose to 42,600 in September from 34,000 in August as homeowners rushed to lock in rates.
Why it matters. Borrowers refinancing over the coming year face higher rates for longer, while UK Finance expects a looser mortgage rule to unlock some £200bn in extra lending.
Britain's biggest banks are battling for mortgage share on razor-thin margins as the Bank of England is expected to lift its base rate to 4 per cent on Thursday. Mortgage approvals slid to a near three-year low of 53,443 in September, while remortgages rose to 42,600 from 34,000 in August, Bank of England data showed. Lloyds' William Chalmers said margins were compressed to around 75 basis points above wholesale borrowing costs.
Latest updates
UK banks compete for mortgage business ahead of expected interest rate rise
Britain's biggest banks are battling for mortgage market share on razor-thin margins. Borrowers are rushing to remortgage ahead of an expected interest rate rise. City AM reported the competition on 2 November 2026. The price war is putting pressure on lenders' profitability while households seek to lock in deals. The report did not include specific rates, margins or the timing of the rate increase.
More Than 2.3 Million UK Households Face Higher Mortgage Payments as Rate Rise Looms
More than 2.3 million UK households are set to face higher payments as they move onto new mortgage deals. The increase follows an expected rise in the Bank of England's interest rate this week. Many borrowers are being forced to remortgage on less favourable terms as their current fixed deals come to an end. The Guardian reports that the jump in repayments could significantly squeeze household budgets. The Bank's decision will be announced later this week, and its outcome will determine how much further pressure borrowers face.