Market news
New mortgage rates rose again in July, Bank of England data shows
The Bank of England's Money and Credit statistics for July, published this morning, show the average rate on newly-drawn mortgages rose from 4.35% to 4.45% between June and July, while approvals for house purchase fell to their lowest level since January 2024.
What the Bank of England published
The Money and Credit release covering July 2026 came out at 9.30am on 1 September. It's the Bank's monthly count of actual lending and borrowing across the economy, built from data lenders report directly, not a survey or a forecast.
Three numbers stand out. Mortgage approvals for house purchase fell 3.6% to 56,100, below the six-month average of 60,800 and the lowest monthly total since January 2024. Gross mortgage lending dropped to £25.9bn from £26.9bn in June. And the effective interest rate on newly-drawn mortgages, the actual average rate borrowers agreed that month, rose from 4.35% to 4.45%.
The rate on the stock of all outstanding mortgages, which moves much more slowly because most borrowers are mid-fix, ticked up from 3.96% to 3.97%.
Why new-mortgage rates went up while approvals went down
These two moves are connected rather than contradictory. Lenders price new fixed deals off swap rates, the wholesale cost of borrowing over two or five years, and swap rates have been higher through the summer than they were in spring. As the cost of funding a mortgage rises, lenders pass some of it on, and pricier deals mean some buyers wait or borrow less, which shows up as fewer approvals.
Propertymark chief executive Nathan Emerson described it as "continued pressure on household finances and caution around moving home." Estate agent and former RICS chair Jeremy Leaf struck a more hopeful note, saying he expects "demand will increase now that the holidays are behind us and buyers can take advantage of better affordability, with salaries increasing faster than house prices despite the increase in mortgage costs since the start of the year."
What a 0.10 percentage point rise actually costs
Ten basis points sounds small next to a full percentage point, but it's still a real monthly number. On a £200,000 repayment mortgage over 25 years, moving from 4.35% to 4.45% takes the monthly payment from £1,094.71 to £1,106.00, an extra £11.29 a month, or roughly £135 a year. For a full breakdown of what bigger rate moves cost, see how much a 1% rate rise actually costs on a mortgage.
The borrowers most exposed to this particular move are the ones remortgaging or completing a purchase this month, since they're the ones locking in July's pricing rather than June's. Anyone still mid-fix isn't affected until their deal ends.
What this means if your fix is ending soon
This is one month of data, not a confirmed trend. But it lines up with the wider pattern since spring: many sub-4% deals have been pulled from the market, and the average two-year and five-year fix have both drifted upward since March. If your current deal ends in the next six months, the number that matters isn't today's headline rate, it's the actual offer for your loan-to-value and term when you come to remortgage. See your fixed-rate mortgage is ending — what are your options for how to compare a product transfer against a full remortgage before you commit.
WatchMyMortgage tracks your renewal date and flags when it's worth acting, so a month like this doesn't slip past you unnoticed. Try the free mortgage timeline or read the guide for how it works.
Frequently asked questions
Does this mean mortgage rates are rising across the board?
It means the average rate on new mortgages agreed in July was higher than in June, by 0.10 percentage points. It's one data point from one month, not proof of a sustained trend, but it fits the pattern seen since March 2026 of fixed rates drifting upward rather than falling.
Why did approvals fall if rates only rose slightly?
Approvals reflect decisions made over the preceding weeks, not just the rate itself. Higher pricing since the spring, alongside broader caution about affordability, has pushed approvals below their six-month average for several months running. The July figure of 56,100 is the lowest since January 2024.
Where does this data come from?
The Bank of England's Money and Credit release, published monthly using actual lending data reported by banks and building societies, not a survey or a lender's own marketing figures. It's the same source used to track approvals, gross lending, and effective interest rates each month.
Know exactly when your rate matters
Set up your free mortgage timeline and we'll track your renewal date, flag when rates move enough to matter, and tell you when it's worth comparing deals, without the sales calls.
Examples are illustrative and rounded. Your own mortgage offer and lender confirm your actual figures and dates. This is information, not financial advice. For advice on your circumstances, speak to a mortgage adviser regulated by the FCA.