Why are there so many different UK mortgage rate figures right now?

Because they measure different things. A "best-buy" rate, like Danske Bank's 4.13% two-year fix (Moneyfacts / HomeOwners Alliance, 30 July 2026), is the single cheapest deal on the market today, usually only available at a low loan-to-value band such as 60%. Moneyfacts' "average" rate, currently 5.57% for two-year and 5.60% for five-year fixes (Moneyfacts / Mortgage Introducer, week to 24 July 2026), is the average of every live product on the shelf, including expensive 95% loan-to-value deals that most borrowers never take out. The Bank of England's "effective" rate, 4.35% in June (Bank of England Money and Credit, released 29 July 2026), is a weighted average of what people who actually completed a mortgage that month are paying, which skews toward the lower-loan-to-value deals more equity-rich movers and remortgagers tend to get. None of the three is wrong. They just answer different questions, and headlines rarely say which one you're reading.

Which mortgage rate figure should I actually pay attention to?

For budgeting purposes, the Bank of England's effective rate is the most useful single number, because it reflects what real borrowers are actually paying on completed deals rather than a shelf-list average or a single best-case offer. At 4.35% in June 2026 (Bank of England Money and Credit, released 29 July 2026), it sits much closer to what a borrower with reasonable equity, rather than a maxed-out 95% loan-to-value buyer, is likely to be quoted. But it's still a national average across every loan-to-value band, so treat it as a sense check rather than your personal quote. The number that actually matters is the one a broker gives you after running your specific loan-to-value, income and credit profile through the whole market, not any of the three headline figures on their own.

Are UK mortgage approvals recovering in 2026?

Partially. Mortgage approvals for house purchase rose to 58,200 in June 2026, up from 56,600 in May, and remortgage approvals to a new lender rose to 34,200 from 33,800 (Bank of England Money and Credit, released 29 July 2026). Net mortgage borrowing more than doubled, to £7.7 billion from £3.3 billion. But June's purchase approval figure still sits below the recent six-month average of 61,400, and both figures follow a much steeper one-month fall reported in May. This looks like a partial rebound rather than a return to strength, and it's arriving at the same time as the effective rate borrowers pay has climbed to a 14-month high, so more people are moving, but at a higher price than earlier in the year.

How much does a rise from 4.22% to 4.35% actually cost per month?

On a £200,000 repayment mortgage over 25 years, moving from an effective rate of 4.22% to 4.35% adds roughly £14.59 a month, or about £175 a year, calculated using the standard UK repayment mortgage formula. On a £300,000 mortgage, the same rate move adds about £21.88 a month, or roughly £262 a year. That's a modest change on its own. What makes it worth noticing is the direction and the context: it's the fourth consecutive monthly rise in the effective rate, it coincides with average whole-market fixed rates also climbing since mid-July, and it's happening just as more borrowers are returning to the market, meaning the cost of moving now is higher than it was even a few months ago.

4.13%, 4.35%, 5.60%: three mortgage rates in one week

Your fix ends in around eight months, so you've started doing the thing every homeowner in your position does: checking the mortgage news every few days to see whether waiting is still paying off. This week that habit made things worse, not better. In the space of a few days you'll have seen a "best-buy" rate of 4.13%, an "average" rate of 5.60%, and a Bank of England "effective" rate of 4.35%, all describing the same UK mortgage market, all technically true, and all more than a full percentage point apart from each other.

Here's the number that actually matters: the effective interest rate on newly drawn mortgages, the rate real borrowers are genuinely paying on deals completed last month, rose to 4.35% in June, up from 4.22% in May and the highest reading in more than a year (Bank of England Money and Credit, released 29 July 2026). That's not the scariest of the three headline figures, and it's not the cheapest either. It's the one that tells you what's actually happening to people in your situation, and it's been rising for four months in a row.

Three numbers, one market, a 1.47-point gap

Start with the cheapest. The best-buy two-year fixed rate for a house purchase this week is 4.13%, from Danske Bank, with a £1,124 fee, available at a lower loan-to-value band (Moneyfacts / HomeOwners Alliance, 30 July 2026). That's the number that shows up in "rates from" headlines, and it's real, but it's a single product for borrowers who fit a specific profile, not a typical quote.

At the other end, Moneyfacts' whole-market average fixed rate sits at 5.57% for two-year deals and 5.60% for five-year deals (Moneyfacts / Mortgage Introducer, week to 24 July 2026). This is the average of every live product on the shelf right now, including the more expensive 95% loan-to-value deals aimed at buyers with small deposits, which most existing homeowners remortgaging with real equity will never be quoted.

In between sits the Bank of England's effective rate: 4.35%, the weighted average of what actually got approved and drawn down in June, across every loan-to-value band, on real completed mortgages (Bank of England Money and Credit, released 29 July 2026). It lands much closer to the cheap end because most people who complete a mortgage in any given month, particularly remortgagers with years of equity built up, aren't taking the priciest 95% deals that drag the Moneyfacts average upward. So if a single "mortgage rates" headline this week left you unsure whether to feel relieved or alarmed, that's not you misunderstanding the market. It's three different questions being reported as if they were one answer.

What each rate is actually measuring

A best-buy rate answers "what's the single cheapest deal on the market today, for someone who fits the ideal profile?" It's a ceiling on optimism, not a typical outcome. Moneyfacts' average rate answers "what does the average product on the shelf cost, across every deposit size?" It's a useful gauge of overall market pricing, but it's pulled upward by expensive low-deposit deals that skew the figure for anyone with meaningful equity. The Bank of England's effective rate answers a narrower, more useful question: "what are real borrowers, who actually completed a deal, currently paying?" (Bank of England Money and Credit, released 29 July 2026).

None of these is designed to mislead you, but none of them is your quote either. Your actual rate depends on your loan-to-value band, your income multiple, and which lender's underwriting you fit best, and a broker running the whole market against your specific numbers will land somewhere the three headline figures can only hint at. So the next time a rate headline moves the news agenda, the first question worth asking isn't "is that good or bad?" but "which of the three is this, and does it actually describe someone like me?"

The Bank of England's full picture: approvals are recovering, but at a higher price

The effective rate wasn't the only number in this week's release. Mortgage approvals for house purchase rose to 58,200 in June, up from 56,600 in May, though still below the recent six-month average of 61,400. Approvals to remortgage with a new lender rose to 34,200 from 33,800. Net mortgage borrowing more than doubled to £7.7 billion from £3.3 billion, and gross lending edged up to £27.4 billion (Bank of England Money and Credit, released 29 July 2026). We covered the steep fall in these same approval figures a week ago, when April's remortgage approvals had crashed to May's total; this release shows that fall did not continue into June, and both purchase and remortgage activity ticked back up.

But recovery and cost are two separate stories here. The same release that shows more people moving also shows the effective rate on outstanding mortgage debt, not just new lending, hit a record high of 3.96%, and the effective rate on new lending rose for a fourth consecutive month. So if you were hoping the "approvals are back" headline meant the market had turned a corner on price as well as activity, it hasn't. More people are moving. They're just paying more to do it than borrowers did earlier in the year.

What a rate near 4.35% actually costs you

On a £200,000 repayment mortgage over 25 years, the rise in the effective rate from 4.22% to 4.35% adds roughly £14.59 a month; on £300,000 it adds about £21.88 a month, both calculated using the standard UK repayment mortgage formula. On their own, those are modest moves. The more useful comparison is against the two other headline numbers you've seen this week. On a £220,000 mortgage, a rate close to this week's best-buy figure of 4.13% works out at roughly £1,177 a month. The Bank of England's effective rate of 4.35% puts you closer to £1,204 a month. Moneyfacts' whole-market average of 5.60% puts you at roughly £1,364 a month, a gap of £187 a month against the best-buy figure for the exact same loan size.

That £187 gap is the real lesson here, not the £14.59 monthly rise in the effective rate itself. It shows how much distance sits between the cheapest advertised deal and the average of everything on the shelf, and it's why running your own numbers against the whole market, rather than anchoring to whichever single figure made the news, is worth the effort before your fix runs out. If you haven't worked through whether a two-year or five-year fix suits your situation better once you do get quotes, the break-even maths on fixing for 2 or 5 years is worth reading alongside this one.

The maths, in one place:

Best-buy two-year fix: 4.13% (Danske Bank, fee £1,124). Bank of England effective rate on new lending: 4.35% in June, up from 4.22% in May, the fourth consecutive monthly rise. Moneyfacts whole-market average: 5.57% (2-year) / 5.60% (5-year). On a £220,000 repayment mortgage over 25 years that spread runs from roughly £1,177 a month at the best-buy rate to £1,364 a month at the whole-market average, a gap of £187 a month for the same loan. House purchase approvals rose to 58,200 in June (from 56,600) and remortgage approvals to 34,200 (from 33,800), while net borrowing more than doubled to £7.7 billion (Bank of England Money and Credit, released 29 July 2026; Moneyfacts / HomeOwners Alliance, 30 July 2026; Moneyfacts / Mortgage Introducer, week to 24 July 2026).

What this means for you

If your fix ends within the next year, the maths points toward getting your whole-market quote now rather than anchoring to any single number from this week's headlines. The best-buy 4.13% figure almost certainly won't be your rate unless you're sitting on a large deposit or years of equity at a low loan-to-value band. The 5.60% average almost certainly overstates it, since it's dragged up by expensive low-deposit products you're not taking out. The Bank of England's 4.35% effective rate is the closest single proxy to what someone in your position is actually paying right now, and it's worth using as your working assumption when you budget, right up until a broker gives you a number built around your own loan-to-value and income. Our remortgage prep checklist covers what to have ready before that conversation. Most people who run these numbers end up getting a market-wide quote weeks before their fix ends rather than relying on whichever rate figure happened to be in the news that day, and given approvals are rising at the same time as the price of moving, that gap between "the headline rate" and "your rate" is exactly the gap worth closing early.