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Bank Rate rises to 4%: what changes for your mortgage and savings?
Bank Rate rose to 4% on 5 November 2026. See what it means for mortgages, savings and credit cards, with payment examples and checks for your own accounts.
At a glance
The Bank of England raised Bank Rate from 3.75% to 4.00% on 5 November 2026. The increase is 0.25 percentage points, also called 25 basis points. Eight members of the Monetary Policy Committee supported that increase; one preferred a larger rise. [1]
For households, the useful question is what happens to their own accounts. A tracker mortgage, a fixed savings bond and a credit card can respond very differently.
Bank Rate is not the interest rate on every mortgage, savings account or credit card. Banks also consider other factors when pricing their products. [2]
Key figures
- 4.00%Bank Rate. Not the rate on every mortgage or savings accountAnnounced 5 November 2026 · Outturn · Source [1]
- 0.25Increase in percentage points. 25 basis points, not a 0.25% increase in repayments5 November 2026 decision · Outturn · Source [1]
- £27.41Extra mortgage payment per month. On £200,000 over 25 years, if the mortgage rate rises from 3.75% to 4%; no feesIllustration, not a lender forecast · PayCalc calculation · Source [3]
- £50.00Extra savings interest per year. On £20,000 untouched for a full year, if AER rises from 4% to 4.25%Illustration, before tax · PayCalc calculation · Source [7]
Why did the Bank raise rates?
The Bank cited inflation pressure from higher energy prices and stronger-than-expected economic activity. It said future decisions would depend on the evidence, rather than follow a predetermined path. [1]
That is a reason to check your budget, not a guarantee of another increase.
Which products could change first?
Contractually linked rates have the clearest connection to Bank Rate. For other products, providers decide whether and when to change their offers.
| Product | What the decision can mean | What to check |
|---|---|---|
| Mortgage tracking Bank Rate | Rate moves under the contract’s tracking formula | Margin, any floor or cap, and effective date |
| Standard variable rate mortgage | Lender decides its rate; the change need not match Bank Rate | Lender’s notice and new payment |
| Existing fixed-rate mortgage | Agreed rate stays fixed for the remaining deal period | Deal expiry and subsequent rate |
| Variable savings account | Provider may increase the rate; no universal matching increase | Your account’s actual rate and notice |
| Existing fixed-rate savings bond | Agreed rate remains fixed for its term | Maturity and access conditions |
| Credit card | Some standard rates track Bank Rate; promotional balances can have different terms | Statement, agreement and offer expiry |
| Existing fixed-rate personal loan | Agreed rate does not change just because Bank Rate rises | Contract and repayment schedule |
Sources: MoneyHelper's mortgage, savings and borrowing guidance; Lloyds' credit-card terms explanation. [3] [4] [5] [6]
There is no single changeover date for every bank or product.
Mortgage example: what does an extra 0.25 percentage points cost?
Consider a £200,000 repayment mortgage with 25 years remaining. These PayCalc UK calculations compare monthly payments at two pairs of hypothetical mortgage rates:
| Mortgage rate before | Mortgage rate after | Payment before | Payment after | Extra per month |
|---|---|---|---|---|
| 3.75% | 4.00% | £1,028.26 | £1,055.67 | £27.41 |
| 5.00% | 5.25% | £1,169.18 | £1,198.50 | £29.32 |
The first row illustrates the arithmetic of a 0.25-point increase. It does not mean borrowers can obtain a mortgage at Bank Rate.
The second could illustrate a tracker charging Bank Rate plus a hypothetical 1.25-point margin. Its rate would move from 5.00% to 5.25%, assuming that margin remains unchanged and no contractual floor or cap affects the change.
Illustrations only: £200,000 repayment mortgage, 25 years remaining, no fees or overpayments. Bars start at zero and show the extra payment, not the total. Not lender quotes or forecasts.
Both comparisons use the same starting balance and remaining term, monthly repayments and no fees or overpayments. We use the annual nominal mortgage rate divided by 12, not APR or APRC. Actual calculations can differ with payment dates and lender methods. These are scenarios, not product quotes.
A 0.25-point increase in the interest rate is not a 0.25% increase in your monthly payment. The payment also depends on the balance and time left to repay.
Use our mortgage calculator to compare your current contractual rate with a notified or hypothetical new rate. Use your remaining balance and term.
What if you are on a fixed rate?
The Bank's decision does not change the rate within your existing fixed period. The issue arises when you need a new deal or move onto your lender's subsequent rate. [3]
New mortgage offers can also change before a Bank announcement as lenders anticipate funding costs. Do not assume every new fixed deal will now become exactly 0.25 points more expensive. [4]
Savings: a higher Bank Rate is not a guaranteed pay rise
For variable savings, check your specific account rather than the provider's headline offer for new customers. Banks do not always pass on a Bank Rate increase automatically. [4]
For a fixed-rate savings bond, the agreed rate stays fixed for the term. A more attractive new offer does not rewrite your existing agreement, and early access may be restricted or penalised. [5]
AER (Annual Equivalent Rate) expresses an annual savings return including compounding. It helps compare accounts, but access restrictions and other conditions still matter. [7]
Suppose an account's AER increased from 4.00% to 4.25%. With the full balance left untouched for a year, including interest, the illustration would be:
| Starting savings | Interest at 4.00% AER | Interest at 4.25% AER | Extra over one year |
|---|---|---|---|
| £5,000 | £200.00 | £212.50 | £12.50 |
| £10,000 | £400.00 | £425.00 | £25.00 |
| £20,000 | £800.00 | £850.00 | £50.00 |
Hypothetical AER rise from 4% to 4.25%, before tax. Each rate applies for a full year, with interest retained and no fees, deposits or withdrawals. Bars start at zero; these are not provider offers.
These figures are before tax and assume each rate applies for the whole year, without fees, deposits or withdrawals. They are not an announcement that any provider has increased its AER.
An increase partway through the year would not produce the full annual difference over that same year. Use the savings calculator with your account's rate and its stated calculation assumptions.
Credit cards: some rates really do track Bank Rate
It would be wrong to say credit cards never respond automatically. For example, Lloyds explains that standard simple interest rates on linked accounts move with Bank Rate, subject to contractual limits. Promotional rates are treated separately. Check whether your own agreement has that link. [6]
APR is an annual borrowing-cost measure that includes interest and relevant compulsory charges. It is not interchangeable with Bank Rate or a card's standard simple interest rate. [8]
An extra 0.25 percentage points of simple annual interest on an unchanged £3,000 balance is £7.50 over a year, or roughly £0.63 a month. This excludes compounding, fees, spending and repayments. It is not a calculation of the minimum payment.
A valid 0% offer does not become 0.25% solely because Bank Rate rises. Continue meeting its conditions: missed minimum payments can put promotional terms at risk, and standard rates can apply when the offer ends. [6] [9]
Use your statement's applicable rates and offer dates, rather than adding 0.25 points to every advertised APR.
Personal loans: check the rate you actually agreed
An existing fixed-rate personal loan generally keeps its agreed rate and repayment schedule. New borrowing offers can change, but not necessarily by the same amount as Bank Rate. [4]
For a new loan, compare the personalised offer, fees and total repayable. Our loan repayment calculator can help compare amounts, rates and terms using its stated assumptions. The lender's repayment schedule remains the reference for your agreement.
Should you overpay your mortgage?
A rate rise alone does not answer that question. Overpayments can reduce future interest, but early repayment charges, more expensive debts and the need for accessible savings can change the decision. [10]
Before making an extra payment, check:
- Your mortgage rate and permitted overpayment allowance.
- Any early repayment charge.
- Whether you need the cash for emergencies or near-term bills.
- What your savings earn after any applicable tax.
Use the mortgage overpayment calculator to explore the numbers. Check whether your lender would reduce the term or monthly payment, and how that compares with the calculator's assumptions.
What this means for you
Find your latest mortgage or account statement and record the rate, whether it is fixed or variable, and any expiry date. Then read any provider notice for the actual new rate and payment date.
Use those figures in your budget and calculations. There is no reason to replace every rate in your calculations with 4%.
Explore your own mortgage figures using your account's actual terms.
Decision dated 5 November 2026. Sources checked 6 November 2026. General information, not personalised financial advice or a product recommendation.
Sources and method
Bank Rate: 4.00%, announced 5 November 2026, confirmed by the Bank of England. The MPC meeting ended on 4 November. Sources checked 6 November 2026; the article publication date is separate.
Mortgage illustrations: P = £200,000; n = 300 months. Payment = P * r / (1 - (1 + r)^(-n)), where r is the annual nominal mortgage rate divided by 12, not APR or APRC. No fees, overpayments or future rate changes. Payments and differences are independently rounded to pennies from unrounded calculations.
Savings illustrations: starting balance multiplied by AER for one full year, interest retained, with no transactions, fees or tax. AER already includes compounding. These hypothetical rates are not provider offers or automatic consequences of the Bank Rate decision.
Card illustration: £3,000 * 0.0025 = £7.50 a year; dividing by 12 gives £0.625, approximately £0.63 a month. Simple interest only: no compounding, fees, spending or repayments. Not an APR conversion or a minimum-payment calculation.
Illustrations are checked against the existing mortgage and savings engines and independent arithmetic in tests. No calculator defaults, formulas or existing example rates are changed. Lloyds is cited for contractual mechanics only, not today's Bank Rate or a product recommendation.
- Bank of England, November 2026 Monetary Policy Summary and Minutes ↗, Decision: 3.75% to 4%, announced 5 November; MPC meeting ended 4 November; vote 8-1. Published 5 November 2026. Accessed 6 November 2026.
- Bank of England, What are interest rates? ↗. Accessed 6 November 2026.
- MoneyHelper, How will interest rates affect my mortgage? ↗, Fixed, tracker and variable mortgage distinctions; payment changes are calculated independently, not treated as a matching percentage change. Accessed 6 November 2026.
- MoneyHelper, How to prepare for an interest rate change ↗. Accessed 6 November 2026.
- MoneyHelper, Fixed-rate savings bonds ↗. Accessed 6 November 2026.
- Lloyds, Bank of England Base Rate and credit cards ↗, Contractual standard simple-rate linkage, limits and separate promotional rates; not the source for the current Bank Rate. Accessed 6 November 2026.
- The Co-operative Bank, What is AER? ↗. Accessed 6 November 2026.
- MoneyHelper, Interest rates explained ↗, APR and mandatory charges. Accessed 6 November 2026.
- Lloyds, How do 0% credit cards work? ↗. Accessed 6 November 2026.
- MoneyHelper, Should you pay off your mortgage early? ↗. Accessed 6 November 2026.
This article is general information, not financial advice. Check your own position before you act.