THE SHORT ANSWER
Bank Rate is holding at 3.75%, but fixed mortgage rates have climbed this autumn. Average residential fixes are back around 6% for the first time in roughly three years. For landlords, add a two-point rise in property income tax from April 2027, and the deals that worked on paper in 2024 deserve a fresh look in 2026.
Where are interest rates right now?
On 17 September 2026 the Bank of England held Bank Rate at 3.75%. The vote was 6–3, and the three dissenters wanted a rise to 4%, not a cut. Inflation was 3.1% in August. The next decision is due on 5 November.
Mortgage pricing has been moving faster than Bank Rate. Moneyfacts reported in early October that the average two-year fixed was 5.98% and the average five-year fixed had hit 6%. That’s residential, but it sets the mood music for buy-to-let too.
What’s happening with buy-to-let rates?
It depends heavily on who you ask and what you’re buying. In mid-October, NRLA’s lender round-up showed headline buy-to-let fixes ranging from the mid-3% range for the sharpest two-year products to around 6% for some five-year and limited company deals. Many of the cheapest rates come with chunky arrangement fees.
For context, Which? reported that the average fixed buy-to-let rate jumped from 4.84% to 5.59% between early March and early April this year. Landlords coming off older five-year fixes are feeling it most.
What’s changing on tax?
From April 2027, income tax on property income rises by two percentage points in England, Wales and Northern Ireland:
- Basic rate: 20% to 22%
- Higher rate: 40% to 42%
- Additional rate: 45% to 47%
Combined with higher borrowing costs and lenders’ rental stress tests, that changes the maths on thin-margin deals in particular.
So what should landlords be doing?
The sensible moves right now are unglamorous. Stress-test before you buy, not after: run the numbers at higher rates and at the new tax rates. Speak to a broker early about how each lender assesses rent cover, because criteria vary more than headline rates. And have the limited company conversation with an accountant rather than with the internet.
This is general information, not financial or tax advice. Speak to a qualified mortgage broker and accountant about your own circumstances.
Questions people actually ask
What is the Bank of England base rate now?
3.75%, held on 17 September 2026. The next decision is due on 5 November 2026.
When does tax on rental income go up?
From April 2027, rates on property income rise by two percentage points: to 22% basic, 42% higher and 47% additional rate, in England, Wales and Northern Ireland.
Should I fix for two years or five?
That depends on your plans for the property, your fees and how much rate risk you can carry, so it’s a question for a qualified broker. What’s worth knowing is that the gap between the cheapest headline rates and the average is wide right now.
