Fixed mortgage cuts are continuing after the Bank of England’s decision to raise Bank Rate to 4%, creating a split between the prices available to some new borrowers and the higher bills facing tracker customers.
Skipton Building Society has announced reductions across its fixed-rate range for new and existing customers from Monday 9 November. The cuts average 0.08 percentage points, with the largest reaching 0.16 points, according to reporting published on 6 November.
At the same time, the society is preparing to increase rates on Bank Rate-linked trackers. The contrast shows why Thursday’s decision cannot, by itself, tell a homeowner what their next mortgage will cost.
The latest cuts reach beyond one lender
The 6 November announcements also included reductions from Kensington and Zephyr. Their changes concern buy-to-let mortgages, so they add evidence of fixed-rate competition without representing residential homeowner deals.
Kensington reduced selected buy-to-let rates by up to 0.15 percentage points at 75% loan-to-value. Zephyr cut selected two-year fixed rates by 0.35 points and five-year fixes by 0.14 points for a limited period.
For residential borrowers, Skipton provides the clearest new development. Its announcement follows the Barclays and Halifax reductions Willow reported earlier in the week, which were announced before the Bank’s decision. The latest news shows that a rate rise has not brought every fixed-price reduction to a halt.
Why a Bank Rate rise does not set every mortgage price
A tracker linked to Bank Rate follows a contractual formula. If the arrangement charges Bank Rate plus a fixed margin, a quarter-point increase in Bank Rate normally adds the same amount to the mortgage rate, subject to its terms.
A new fixed mortgage is priced differently. The lender is offering an interest rate for a future period, commonly two or five years. Funding and hedging costs over that period matter, alongside the lender’s own pricing decisions.
The distinction appears in the Office for Budget Responsibility’s forecasting methodology: it uses Bank Rate as a reference for variable mortgages and market expectations for two- and five-year swap rates when modelling fixed borrowing costs.
Those markets look ahead. If a Bank Rate move was already anticipated, the announcement does not necessarily add a new cost to fixed-rate pricing. Expectations for what follows, and the price of securing funding over the relevant period, can move differently from the rate set today.
Skipton cited movements in the mortgage market as creating room for reductions despite the wider uncertainty. That makes the latest cuts possible without establishing that the Bank’s next decision will reverse Thursday’s increase.
Tracker customers face a more direct change
For existing tracker borrowers, the immediate question is when the higher rate reaches their account and monthly payment. Those dates are not necessarily the same.
Skipton’s customer notice separates the rate-change date from the payment-change date. Borrowers should use the notification for their own mortgage, particularly where the loan originally came from another lender or brand.
The cash effect becomes more visible on larger balances. On £500,000 of interest-only borrowing, a 0.25 percentage-point rise adds approximately £104.17 a month, or £1,250 a year, assuming the balance stays unchanged. On £1 million, the equivalent increase is about £208.33 a month.
A repayment mortgage will produce a different payment change because each instalment includes capital as well as interest. Its remaining term and starting rate are needed to calculate the increase.
What another rate move would mean
Consider a hypothetical £500,000 interest-only tracker charging Bank Rate plus one percentage point. With Bank Rate at 4%, the mortgage rate would be 5%, producing a monthly interest payment of approximately £2,083.
| Bank Rate scenario | Illustrative mortgage rate | Monthly interest |
|---|---|---|
| 3.75% | 4.75% | £1,979.17 |
| 4.00% | 5.00% | £2,083.33 |
| 4.25% | 5.25% | £2,187.50 |
The example shows both directions of travel. A tracker can pass on a fall in Bank Rate, but it also exposes the household to further increases. Interest-only payments leave the capital outstanding, which still needs a separate repayment plan.
For a borrower choosing between a fix and a tracker, this turns a view about the economy into a practical budgeting question: how much payment movement can the household comfortably absorb?
October’s higher averages still matter
The selected cuts follow a more expensive month for new mortgage borrowing. The Bank of England’s October data showed the average quoted two-year fix at 75% LTV rising from 5.13% to 5.39%. The equivalent five-year average increased from 4.98% to 5.19%.
These are monthly averages for specified product categories. They cover the period before November’s cuts and Thursday’s Bank Rate increase, so they cannot measure the effect of either development.
Together, the releases describe a market in which prices rose across important categories in October, followed by some lenders trimming selected deals. A recent reduction can therefore improve an offer without returning it to the price a borrower saw earlier in the autumn.
The lowest advertised rate can carry a substantial fee
The buy-to-let announcements illustrate why the headline percentage needs context. Kensington’s reported prime two-year rate from 3.69% carries a 5% product fee. Zephyr’s lowest quoted rates come with a 7% fee, although other fee options are available.
On a £500,000 loan, those percentages represent £25,000 and £35,000 respectively. They are significant costs, particularly when assessing a short fixed period. These are landlord products and should not be used as direct comparisons with a homeowner’s mortgage quotation.
For residential borrowers too, a meaningful comparison includes fees and interest over the same period, together with the balance remaining. Adding a fee to the loan also means paying interest on it.
Flexibility still has a value after rates rise
A borrower planning to sell, repay a large amount or restructure borrowing may place particular value on being able to leave a mortgage without a substantial charge. Some trackers offer that flexibility, but the early repayment terms must be checked for the actual product.
A fixed rate may provide a lower starting payment or greater certainty while carrying restrictions that matter later. Conversely, flexibility can become expensive if variable payments rise further and the borrower keeps the loan for longer than expected.
The useful comparison is the expected cost over the period the mortgage will be held, including any charges on exit. Choosing a tracker solely because of an assumed future rate cut leaves that decision dependent on an outcome the borrower cannot control.
Renewal decisions need the actual products
Existing fixed-rate borrowers keep their agreed rate during the fixed period. The latest announcements matter most when they approach renewal, need additional borrowing or are arranging a new purchase.
MoneyHelper’s remortgaging guidance recommends comparing the existing lender’s options with alternatives, allowing for fees and switching costs. For borrowers with a pending application, a newly reduced product may also warrant a review before completion, subject to the lender’s process.
Willow can compare suitable fixed and tracker options using the current mortgage balance, planned holding period and likely payment changes. The latest news makes that comparison more relevant: Bank Rate has risen, but the price of a new fixed mortgage is still being set product by product.
Does your mortgage still fit after the rate rise?
Willow can compare suitable fixed deals with your tracker’s new rate, or review renewal options before your current fix ends, including fees and the cost of leaving early.
Explore Your Mortgage OptionsFrequently asked questions
Why can fixed mortgage rates fall after Bank Rate rises?
New fixed rates reflect funding and hedging costs over the fixed period, as well as lender pricing decisions. Those costs can move differently from today’s Bank Rate. A Bank Rate-linked tracker instead follows the contractual link to Bank Rate.
When will Skipton tracker borrowers see the increase?
For trackers taken out with Skipton Building Society, the rate change takes effect on 19 November 2026 and monthly payments change from 1 December. Skipton lists different rate dates for some mortgages originally from other brands.
Are Kensington’s and Zephyr’s cuts residential homeowner deals?
The reductions reported on 6 November concern buy-to-let mortgages. They should not be treated as rates available for buying or remortgaging a main residence.
What does a 0.25 percentage-point rise cost on a £500,000 mortgage?
On a constant £500,000 interest-only balance, it adds approximately £104.17 a month in interest. A repayment mortgage has a different payment calculation, depending on its rate and remaining term.
Should I move from a tracker to a fixed rate now?
The decision depends on the fixed and tracker rates available to you, fees, early repayment charges and your plans. Compare the total cost over the same period and whether you could manage further payment increases.
About the author
Wesley Ranger is a director of Willow Private Finance. His work covers residential mortgages and specialist property finance, including complex income, higher-value borrowing and remortgages.