UK mortgage rates have traced a dramatic arc over the past 35 years — from double digits in the early 1990s, to historic lows around 1% in 2021, to a sharp spike above 6% in 2023, and now a gradual descent back toward 4–5% in 2026. Understanding this history helps current borrowers make better decisions about fixing versus tracking rates.
2-Year Fixed Rate Mortgage — UK History
| Year | Average 2-year fix | Bank of England base rate | Key context |
|---|---|---|---|
| 1990 | ~14.0% | 14.88% | Post-ERM crisis, Black Wednesday approaching |
| 1995 | ~8.0% | 6.5% | Mid-90s normalisation |
| 2000 | ~6.5% | 6.0% | Dot-com boom, stable rates |
| 2005 | ~5.2% | 4.75% | Pre-financial crisis, strong economy |
| 2008 | ~6.0% | 5.0% → 2.0% | Global financial crisis hits late 2008 |
| 2009 | ~3.5% | 0.5% | Emergency rate cut, quantitative easing begins |
| 2012 | ~3.5% | 0.5% | Rates plateau at historic lows |
| 2015 | ~2.5% | 0.5% | Continued post-crisis suppression |
| 2017 | ~2.0% | 0.25% → 0.5% | First small rate rise in decade |
| 2020 | ~1.8% | 0.1% | Covid emergency cut — joint historic low |
| 2021 | ~1.2% | 0.1% | All-time low for UK mortgage rates |
| 2022 | ~3.5% | 0.1% → 3.5% | Rate hiking cycle begins; Truss mini-budget spike |
| 2023 | ~6.5% | 5.25% | 14-year high — fastest rise in modern history |
| 2024 | ~5.0% | 5.25% → 4.75% | Rate cutting cycle begins August 2024 |
| 2026 | ~4.5% | ~4.25–4.5% | Gradual normalisation continues |
5-Year Fixed Rate Mortgage — UK History
| Year | Average 5-year fix | Notes |
|---|---|---|
| 2010 | ~4.5% | Relatively stable post-crisis |
| 2015 | ~3.0% | Low rate era, 5-year fix popular |
| 2019 | ~2.4% | Sub-2% deals emerging |
| 2021 | ~1.5% | Historic lows across all terms |
| 2022 | ~4.5% (year-end) | Sharp rise following base rate hikes |
| 2023 | ~5.5–6.0% | Peak of the cycle |
| 2024 | ~4.5% | Easing as cuts priced in |
| 2026 | ~4.3% | Further gradual reduction |
The 2022–2023 Mortgage Rate Shock
The rise from 1.5% to 6.5% on 2-year fixes between 2021 and 2023 was the sharpest sustained increase since the late 1980s. For a homeowner with a £250,000 mortgage:
| Rate | Monthly payment (25yr) | Annual cost |
|---|---|---|
| 1.5% (2021 fix) | £1,000 | £12,003 |
| 4.5% (2024 remortgage) | £1,390 | £16,681 |
| 6.5% (2023 peak) | £1,688 | £20,256 |
| Extra cost vs 2021 | +£688/month | +£8,253/year |
This mortgage payment shock — an additional £500–£800/month for many households — was a major driver of the cost of living squeeze in 2023–2024.
Tracker Rates vs Fixed Rates — Historical Comparison
Tracker mortgages follow the Bank of England base rate (typically base rate + 0.5–1.5%). They fell sharply from 2009–2021 as base rate hit 0.1%, making them very cheap — but then rose steeply in 2022–2023.
Fixed rates reflect gilt yield expectations rather than just the current base rate. In periods of uncertainty (like post-Truss), fixed rates can rise sharply even before base rate moves.
| Period | Tracker advantage | Fixed advantage |
|---|---|---|
| 2010–2020 | ✅ Often cheaper than fixes | Predictability |
| 2021 | ✅ Both at historic lows | — |
| 2022–2023 | ❌ Rose sharply as base rate rose | ✅ Those with long fixes protected |
| 2024–2026 | ✅ Starting to benefit from cuts | ❌ Pricing in cuts more slowly |
What This Means for Buyers in 2026
- Current rates (~4.5%) are historically mid-range — above the 2010–2022 low era, well below 1980s–90s peaks
- Fixing now (2-year or 5-year) protects against any unexpected rate rises while rates are still declining
- Trackers make sense if you believe base rate will fall further and quickly — but add payment uncertainty
- The typical 2024–2025 mover who fixed at 5–6% should see lower rates available at remortgage in 2026–2027
For help deciding: mortgage types explained UK, how interest rates affect your mortgage, and Bank of England base rate history.