Are UK mortgage rates going up and how can families save money?

UK mortgage rates are already edging higher after a sharp rise in global bond yields and swap rates, and this is likely to feed through into more expensive fixed-rate deals over the coming weeks. For parents, this means higher monthly payments when remortgaging or buying a home, tighter affordability checks, and less spare cash for everyday family costs, although there is still time in many cases to lock in a rate, compare options and use a good broker to limit the damage to the household budget.

Why are mortgage rates rising again?

Rates are climbing because a spike in oil prices has pushed up inflation worries, which has triggered a global bond sell-off. That has driven up gilt yields and swap rates, the benchmark lenders use to price fixed-rate mortgages, so banks are now passing those higher funding costs on to borrowers.

How much more might parents have to pay on their mortgage?

Even a relatively small increase of around 0.28 percentage points can add roughly £16 per month for every £100,000 borrowed over 25 years. For a typical family mortgage of £300,000, that is close to £50 extra every month, money that could otherwise go towards childcare, school costs or savings.

Will existing fixed-rate mortgages go up too?

If a family is on a fixed-rate deal that is not due to end for at least six to twelve months, monthly payments should stay the same for now. The pressure comes when that fix ends, or if they are on a tracker deal linked to the Bank of England base rate and that rate rises in the future.

What can parents do to protect their family budget?

Parents can often reserve a new mortgage rate several months in advance, either with their current lender through a product transfer or by switching with the help of an independent broker. Comparing the whole market, trimming other costs, overpaying slightly where possible and choosing the right fixed term can all soften the impact on family finances.

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^‡From £10 per month for up to £300,000 is an example based on the following pricing illustrations. £10 per month Life Insurance quoted rates are based on level term life cover for non-smokers with no pre-existing medical conditions or other high risk factors. Individual factors and medical underwriting will be assessed which may vary the premium and sum assured you are eligible for or may result in you being declined. Correct as on 7th February 2025.
£322,952 over 20 years - 30 year old born in 1995 (Aviva)
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£117,810 over 20 years - 30 year old born in 1995 (Aviva)
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£56,577 over 15 years - 40 year old born in 1985 (Aviva)
£35,960 over 15 years - 45 year old born in 1980 (Aviva)
£26,787 over 10 years - 50 year old born in 1975 (Aviva)
£17,018 over 10 years - 55 year old born in 1970 (Aviva)
£10,115 over 10 years - 60 year old born in 1965 (Aviva)
£6,181 over 10 years - 65 year old born in 1960 (Aviva)
£3,746 over 10 years - 70 year old born in 1955 (Aviva)

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