UK Mortgage Rate Cuts in May 2026: Why Lenders Are Repricing After the Bank of England Hold
Published 07 May 2026
Several major UK lenders trimmed selected fixed-rate mortgages through April and into the first week of May 2026, taking average two- and five-year fixed pricing lower for three weeks running. The cuts come immediately after the Bank of England held Bank Rate at 3.75% on 30 April, with one Monetary Policy Committee member voting to raise it to 4% rather than hold or cut. The question for borrowers approaching a remortgage or purchase is whether this is the start of a sustained move down or a short window before swap rates push pricing back the other way.
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What Lenders Have Cut Since the April Hold
Average two-year and five-year fixed-rate mortgages have fallen for three weeks in a row. Moneyfacts data published on 1 May 2026 placed the typical two-year fix at 5.78%, a three basis point fall on the previous week, and the typical five-year fix at 5.68%, down two basis points. The largest single move was at the lower end of the loan-to-value range, where two-year fixes up to 50% LTV fell by 15 basis points to 5.38%.
Those cuts come from a starting point well above where the market sat at the end of February. The current two-year fix average of 5.78% compares with 4.84% on 6 March 2026, before swap rates jumped on the back of the Middle East energy shock. The five-year average of 5.68% compares with 4.96% over the same window.
The pattern is one of selective rather than sweeping reductions. The first wave of post-conflict cuts in mid-April saw a number of large high-street lenders reduce selected products by between 20 and 45 basis points. Subsequent weeks have seen smaller, more targeted moves rather than a single market-wide reset, with several lenders trimming individual loan-to-value tiers or product fees rather than re-pricing whole ranges.
What the Bank of England Said on 30 April
The Monetary Policy Committee voted by an 8-1 majority to hold Bank Rate at 3.75% on 30 April 2026. The single dissenting vote was for a 0.25 percentage point increase to 4%, the first time a Committee member has voted to raise rates since the previous hiking cycle ended in August 2023. The Committee tied the decision to uncertainty over how the conflict in the Middle East will feed through to UK energy prices and inflation.
The Committee also said Consumer Prices Index inflation, currently at 3.3%, is likely to be higher later in 2026 as the effects of higher energy prices feed through. It published three scenarios in its accompanying Monetary Policy Report, with a worst-case path that sees inflation rising materially above target before the shock fades. The Bank's framing was deliberately balanced rather than dovish, noting that a stronger second-round inflation response could justify keeping policy more restrictive for longer.
For mortgage borrowers, the practical takeaway is that a hold at 3.75% should not be read as a signal that fixed-rate pricing is heading uniformly lower. The Bank's own language left the door open to higher rates as well as lower ones, and the lenders pricing two- and five-year fixed deals are looking at exactly the same set of scenarios.
To talk through how the April hold and current swap-rate moves affect your timing, call 01202 155992 or contact Mortgage One.
Why Swap Rates Are Doing the Heavy Lifting
Fixed-rate mortgages in the UK are funded and hedged in wholesale markets. The interest rates lenders pay to lock in funding for two, five or ten years are tracked through SONIA swap rates, and those swap rates respond to the market's view of where Bank Rate will sit over the relevant period. When the market becomes more confident that Bank Rate will fall, swap rates ease and lenders can reduce fixed pricing without compressing margins. When the market becomes less confident, the same mechanism works in reverse.
The current mismatch between Bank Rate and fixed mortgage pricing is a function of that mechanism. Bank Rate is at 3.75%, but two- and five-year fixed averages remain near 5.7%, around two percentage points above the policy rate. Two-year fixed pricing rose from 4.84% on 6 March to a peak of 5.58% by 26 March, according to Moneyfacts data, in a window where Bank Rate did not move. Pricing has retraced part of that move but remains well above where it sat before the energy shock.
What makes the current cut wave fragile is that swap rates have not collapsed back to pre-conflict levels. The cuts of the past three weeks reflect lenders trimming margins where competitive pressure is sharpest, not a wholesale repricing on the back of cheaper funding. If swap rates drift higher again on stronger energy or inflation data, the May cuts could slow or reverse rather than build into a sustained downtrend. Mortgage One's UK mortgage rate forecast hub sets out the bigger picture on Bank Rate, swap markets and lender pricing.
What This Means If Your Fixed Deal Ends in 2026
Approximately 1.8 million fixed-rate mortgages are due to come to an end in 2026, according to UK Finance. For most of those borrowers, the deal they roll onto will look noticeably more expensive than the one expiring, even after the recent cuts. A two-year fix taken out in 2024 at around 4.5% to 5% is now reverting into a market where the average two-year fix sits at 5.78% and standard variable rates remain considerably higher again.
The decision facing borrowers approaching the end of their fix is therefore not whether the new rate will be higher than the old one, but how to manage the timing of the switch. Most lenders allow a new deal to be reserved up to six months before the existing fix ends, and many will permit a switch to a lower rate if pricing improves before completion. That option, where it is available, can be useful in a market where the direction of travel is genuinely uncertain.
Borrowers who are part-way through a fixed deal but worried about where pricing will be when their term ends face a different decision: whether the early repayment charges and the cost of switching now would be outweighed by securing a rate before any further increase. The maths varies case by case and depends on the lender, the product and how long the existing deal has left to run. Mortgage One's coverage of why mortgage rates have been rising again sets out the funding mechanics borrowers approaching the end of their fix should understand.
Locking In Now Versus Waiting
There is no risk-free answer to whether to lock in now or wait. The case for securing a rate now is straightforward: if swap rates and lender pricing drift higher from here, locking in pre-empts that move. The case for waiting is that the cuts of the past three weeks have momentum, and a sustained ceasefire or softer inflation data could see swap rates fall further. Both views can be defended from the current data.
What changes the balance is the borrower's own position. A purchase with a fixed completion date and a finite mortgage offer expiry has a different timing problem from a remortgage where the existing fix runs another six months. A higher loan-to-value applicant, more sensitive to product withdrawals, has a different risk profile from a lower loan-to-value remortgager with substantial equity. Generic 'lock in now' or 'wait and see' commentary does not account for those differences.
For borrowers whose fixed deal ends in 2026, the most useful step is usually a structured affordability and timing review against the products actually available, not against headline averages. Mortgage One's full 2026 interest rate predictions and lender forecasts piece sets out what current and projected pricing means for borrowers across different scenarios.
Figures as of 7 May 2026 London.
For a confidential review of your fixed-rate end date and the options available across the whole of market, call 01202 155992 or contact Mortgage One.
The information provided in this article is for general guidance only and does not constitute personal or regulated financial advice. If you'd like to understand what these moves could mean for you, speak to Mortgage One. We can explain your options and timings based on your specific circumstances.
Some Buy to Let mortgages are not regulated by the Financial Conduct Authority.
FAQs
1. Has the Bank of England raised interest rates in 2026?
No. The Bank of England has held Bank Rate at 3.75% throughout 2026, including at the 30 April Monetary Policy Committee meeting. One member of the Committee voted to raise rates to 4% at that meeting, but the majority voted to hold.
2. Why are mortgage rates higher in 2026 than they were at the end of 2025?
The Middle East energy shock from late February 2026 pushed up oil and gas prices and raised UK inflation expectations. Swap rates, which lenders use to price fixed mortgages, rose sharply through March before partially retracing. Average two-year fixed mortgage rates moved from around 4.84% in early March to 5.58% by late March, before easing to 5.78% in early May.
3. Which lenders have cut mortgage rates in May 2026?
Selected lenders have repriced individual products rather than making sweeping cuts. The earlier wave of cuts in mid-April saw reductions of between 20 and 45 basis points across selected products from a number of large high-street lenders. Subsequent weeks have seen smaller, more targeted moves rather than a single market-wide reset.
4. Should I lock in a mortgage rate now or wait?
There is no single answer. Locking in protects against further rises if swap rates drift higher. Waiting could capture lower rates if cuts continue. The right call depends on when an existing fixed deal ends, the loan-to-value involved, completion deadlines on a purchase, and tolerance for payment uncertainty. A whole of market mortgage broker can review the products available against the borrower's specific circumstances.
5. Can I reserve a remortgage rate before my current fix ends?
Most lenders allow a new fixed-rate deal to be reserved up to six months before an existing fix ends. Many will also permit a switch to a lower rate if pricing improves before the new deal completes. The exact rules vary by lender and by product.
6. How much does the current rate environment matter for buy-to-let landlords?
Buy-to-let pricing is influenced by the same swap-rate dynamics as residential pricing, but rental cover requirements and stress rates can amplify the impact on borrowing capacity. Some Buy to Let mortgages are not regulated by the Financial Conduct Authority.