Swap rates and what you need to know

Why are mortgage rates changing when the Bank of England hasn't moved interest rates?

I highly recommend checking the latest on swap rate movement on https://propertyresearch.uk/insights/swap-rates Here, you will find all that you need to know tracking the relationship between Bank of England base rate and swap rates. Be sure to check out propertyresearch.uk

Information here is accurate as at 15 July 2026 and will change without notice.

One question I get asked all the time is:

"If the Bank of England hasn't changed the Base Rate, why have mortgage rates gone up (or down)?"

The answer is swap rates.

Think of it like this...

🏠 The Bank of England Base Rate is today's weather. It affects variable-rate mortgages and gives an indication of where borrowing costs are today.

📈 Swap rates are the weather forecast. They reflect what financial markets think interest rates are likely to do over the next 2, 3 or 5 years.

Here's why that matters:

When lenders offer a fixed-rate mortgage, they're committing to a rate for several years. To protect themselves from future interest rate movements, they use swap rates.

If swap rates rise because markets expect inflation or interest rates to stay higher for longer, lenders' costs increase, even if the Bank of England hasn't changed the Base Rate.

The result? Fixed mortgage rates can increase without any change to the Base Rate.

Likewise, if swap rates fall because markets expect lower interest rates in the future, lenders may reduce their fixed mortgage rates before the Bank of England makes a move.

The key takeaway: Don't just watch the Bank of England announcements. Swap rates often move first, and mortgage lenders usually react to those movements.

Whether you're buying your first home, refinancing, expanding your Buy to Let portfolio or looking for commercial finance, understanding what's happening in the market can help you make better decisions.

Have a question about mortgage rates or property finance? Drop it in the comments and I'll be happy to answer.

📩 If you'd like to discuss your own mortgage or funding requirements, send me a direct message or contact CYS Financial Ltd for a no-obligation conversation.

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