What’s happening to UK interest rates and what does it mean for mortgages?
What's happening to UK interest rates and what does it mean for mortgages?. "Related topicsPersonal financeMoneyCost of Living UK economyBank of EnglandMore on this storyWhat's happening to UK interest rates and what does it mean for mortgages?
What happened
What is happening to UK interest rates and inflation? Published22 JulyHow do interest rate cuts affect mortgages, loans and savings rates? What is happening to interest rates in other countries? It means that you'll get better returns on high-yield savings accounts and [certificates of deposit], but you'll also see higher interest rates on your credit cards," said Matt Schulz, LendingTree's chief consumer finance analyst. Private student loans tend to have a variable rate tied to the Libor, prime or Treasury bill rates — and that means that, as the Fed rate rises, those borrowers will also pay more in interest.
Higher interest rates make borrowing more expensive for people wanting to secure loans, mortgages, and credit cards, but can lead to better returns on savings. Many US homeowners have 30-year and 15-year fixed-rate mortgages, and changes to interest rates will not impact their monthly repayments.
The wider picture
The interest rate set by the Bank of England affects mortgage, loan and savings rates for millions. Image source, Getty ImagesByKevin PeacheyCost of living correspondentPublished16 July 2021Updated 16 September 2026 14:50 BSTThe Bank of England is expected to keep UK interest rates unchanged at 3. Interest rates affect mortgage, credit card and savings rates for millions of people. What are interest rates and why do they change? The Bank of England's base rate is what it charges other banks and building societies to borrow money, which influences what they charge their own customers for mortgages as well as the interest rate they pay on savings.
Published14 hours agoWhat is expected to happen to UK interest rates? At the start of the year, the Bank had been expected to cut interest rates twice in 2026, with the first drop predicted to come in March or April. Published2 days agoWhat does an Andy Burnham-led government mean for your money?
What has been reported
About 800,000 fixed-rate mortgages with an interest rate of 3% or below are expected to expire every year, on average, until the end of 2027. Lenders can decide to reduce their own interest rates if Bank cuts make borrowing costs cheaper. Cuts in rates particularly affect those who rely on the interest from their savings to top up their income. In recent years, the UK has had one of the highest interest rates in the G7 – the group representing the world's seven largest so-called "advanced" economies.
The US central bank – the Federal Reserve – has cut interest rates three times since September 2025, taking them to the current range of 3. But Trump demanded the Federal Reserve slash interest rates to 1% "or less," hours after the central bank announced its first rate hike since 2023. Evan Vucci | ReutersPresident Donald Trump said Wednesday he still has confidence in Federal Reserve Chair Kevin Warsh, but also said he wants the central bank to slash interest rates to 1% "or less.
The decision by the 12-member Federal Open Market Committee to raise benchmark interest rates to a target range of 3.
What happens next
Earlier Wednesday and after the Fed's rate decision, Trump, in a Truth Social post, demanded the Fed lower interest rates. "LOWER THE INTEREST RATES FOR THE UNITED STATES OF AMERICA, AND FAST! Less than two weeks earlier, Trump threatened that if the Fed doesn't cut rates, he will cut off trade with countries that have trade surpluses with the U. Image source, Getty ImagesByKevin PeacheyCost of living correspondentPublished47 minutes agoPolicymakers at the Bank of England are expected to keep interest rates unchanged despite price rises accelerating due to the prolonged conflict in the Middle East.
Bank of England governor Andrew Bailey told the BBC at the time: "If we get a continuation of this conflict going on and oil prices stay above $100 a barrel. . . the odds are that interest rates will have to go up higher. The Bank uses interest rates to control inflation, which charts the rising cost of living. The MPC will be aware that, citing the Middle East conflict and warning inflation was "set to remain well above" its 2% target for some time, the European Central Bank recently raised interest rates to 2.
The report has been compiled by The Daily Waves using information reported across bbc.co.uk, cnbc.com. Details are presented according to the information available at the time of publication and may change as authorities, organisers or other relevant parties provide updates.