Mortgage rates likely to stay high through 2027 as inflation pressures persist
Economists say the Bank of England will keep raising rates, keeping mortgage costs near current six-percent levels into 2027.
A surge in oil prices caused by the Middle East conflict has lifted UK inflation above 4 %, leading the Bank of England to plan additional interest-rate increases. Current two-year and five-year fixed mortgages sit near 6 %, while swap rates hover between 4.65 % and 4.75 %. Economists Ruth Gregory and Thomas Pugh forecast the BoE base rate reaching 4 % in November and 4.25 % in February, with no cuts expected until the end of next year and rates staying above 3.75 % until 2028.
Experts such as Alper Kara and Nick Mendes expect mortgage rates to stay at today’s levels through 2027, though a modest rise cannot be ruled out. Variable-rate borrowers may face immediate payment hikes, while some analysts, like Peter Stimpson, see a possible rate-cut window in spring 2027 if inflation eases. Mortgage advisers recommend locking in rates early to mitigate the uncertainty.
Why it matters
Homeowners could face higher monthly payments for years if mortgage rates stay near six percent.
In this story
