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    Albion Financial Advice
    Updated daily from Bank of England data

    Current UK Rates

    Bank of England Bank Rate and the 2-year and 5-year SONIA swap rates that lenders use to price fixed-rate mortgages, with daily, weekly and monthly movements.

    Bank of England Bank Rate

    Set by the Monetary Policy Committee (MPC) eight times a year. Drives tracker and variable rates.

    2-Year SONIA Swap

    The benchmark behind 2-year fixed mortgage pricing.

    5-Year SONIA Swap

    The benchmark behind 5-year fixed mortgage pricing.

    SONIA swap rates: full comparison

    Changes are shown in basis points (bps, 1 bp = 0.01 percentage points) and, marked "rel.", as a relative percentage of the earlier rate: a move from 3.715% to 4.295% is +58 bps, or +15.6% relative.

    Where swap rates are heading

    The last 30 trading days show the current direction of travel; the five-year view puts today's levels in context.

    Last 30 trading days

    2-year and 5-year SONIA swap rates, daily closes, with the current Bank Rate for reference.

    Last 5 years

    Daily history of the 2-year and 5-year SONIA swap rates from the Bank of England OIS curve, with Bank Rate (dashed) for comparison.

    Bank Rate: the last 50 years

    Every Bank of England Bank Rate decision since 1976, with the 50-year average for context. Zoom in to recent years.

    Plain-English guide

    How swap rates set the price of your fixed-rate mortgage

    Fixed mortgage rates are not set by Bank Rate. They are built on the cost of locking in money for two or five years in the swap market, plus the lender's margin.

    Your lender needs certainty too

    When you take a fixed-rate mortgage, your lender promises you the same interest rate for two, three or five years whatever happens to interest rates in the wider economy. The lender itself does not have that certainty: the money it lends you is funded by savers' deposits and by borrowing on the financial markets, and the cost of that funding changes every day.

    To manage that risk, lenders use interest rate swaps. In a swap, the lender agrees to pay a fixed rate for a set number of years and in return receives a floating rate linked to SONIA, the overnight rate at which banks lend sterling to one another. Locking in a fixed cost of funds for five years lets the lender safely offer you a five-year fixed rate. The fixed rate agreed in that contract is the SONIA swap rate, and it is the single most important input into fixed mortgage pricing.

    How a fixed rate is built
    5-year SONIA swap rate
    swap rate
    Lender's margin
    typically 0.5% to 1.5%
    costs, credit risk, capital and profit; lower with a bigger deposit
    Your 5-year fixed rate
    swap + margin

    Illustrative only. Actual pricing depends on the lender, loan-to-value and your circumstances.

    Swap rate plus margin equals your fixed rate

    In simple terms, a lender's fixed rate is the swap rate for the matching term plus a margin. The margin covers the lender's operating costs, the risk that some borrowers do not repay, regulatory capital and profit. Margins vary with competition and with your deposit size, which is why a borrower with a 40 per cent deposit is offered a lower rate than one with 5 per cent, but the starting point for everyone is the swap rate. When the two-year swap rises by a quarter of a percentage point and stays there, two-year fixed deals across the market usually follow within a couple of weeks.

    Why fixed rates can move before Bank Rate does

    Swap rates are forward-looking. They reflect what the market expects the Bank of England to do over the life of the swap, not just today's Bank Rate. If investors start to expect fewer cuts, or more increases, swap rates rise immediately and lenders reprice fixed deals even though Bank Rate has not changed. The reverse is also true: fixed rates can fall while Bank Rate stands still if the market becomes more confident that cuts are coming. Trackers and variable rates, by contrast, follow Bank Rate itself.

    What this means for you

    Three practical ways to use the figures on this page.

    1. 1

      Choosing a term

      When the two-year swap sits well above the five-year swap, longer fixes are relatively cheap and the market expects rates to fall. When the curve is the other way round, shorter fixes are cheaper and the market expects rates to rise.

    2. 2

      Timing an application

      A mortgage offer usually locks your rate for up to six months. If swaps are trending upwards, securing a rate early protects you; if they are falling, it can be worth asking your adviser about lenders that let you switch to a lower deal before completion.

    3. 3

      Remortgaging

      The direction of the 30-day trend above is a useful early warning of where remortgage pricing is heading over the coming weeks.

    Swap rates explain the direction of fixed-rate pricing, but they are only one part of the picture. Your circumstances, the lender's appetite and the products available on the day all matter. If you would like to understand what current market conditions mean for your mortgage, we are happy to talk it through.

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    Frequently asked questions

    What is a SONIA swap rate?

    SONIA (Sterling Overnight Index Average) is the interest rate banks pay to borrow sterling overnight from each other. A SONIA swap is a contract in which one party pays a fixed rate for a set period, for example two or five years, in exchange for receiving the floating overnight SONIA rate. The fixed rate agreed today is the swap rate, and it represents the market's best estimate of where overnight rates will average over that period.

    Why do lenders look at swap rates when pricing fixed-rate mortgages?

    When a lender offers you a five-year fixed rate it takes on the risk that its own funding costs rise during those five years. Lenders hedge that risk in the swap market, so the five-year swap rate is effectively their cost of locking in money for five years. They add a margin for operating costs, credit risk and profit, and the result is the fixed rate you see advertised. That is why fixed mortgage rates tend to move with swap rates, often weeks before any change to the Bank of England Bank Rate.

    Which matters more for my mortgage: Bank Rate or swap rates?

    It depends on the product. Trackers and most standard variable rates follow Bank Rate directly. Fixed rates are priced from swap rates of a matching term, so a two-year fix follows the two-year swap and a five-year fix follows the five-year swap. Because swaps reflect expectations of future Bank Rate decisions, they usually move first.

    How quickly do mortgage rates react to swap rate changes?

    Lenders typically reprice within days to a couple of weeks of a sustained move. A single day's movement rarely changes anything, but a shift of 20 to 30 basis points held over a fortnight is often followed by repricing across the market. Watching the 30-day trend on this page gives a good early indication of which way fixed rates are likely to head.

    Where does this data come from and how often is it updated?

    The swap rates are the 2-year and 5-year points on the Bank of England's daily OIS (overnight index swap) spot curve, which is the official published measure of SONIA swap rates. Bank Rate comes from the Bank of England's statistical database. Our system checks for new Bank of England data every three hours. The Bank publishes each trading day's curve on the following working day, so the latest figure is normally yesterday's close. The MPC decision, vote split and next announcement date come from the Bank's official voting-history spreadsheet, Monetary Policy Summary and MPC calendar.
    Last checked for new data: loading…Last successful update: loading…

    Sources: Bank of England yield curve statistics (OIS spot curve, 2-year and 5-year points, published each working day for the previous trading day) and the Bank of England Bank Rate series IUDBEDR. Our system checks the Bank of England for new figures every three hours, and the Bank publishes each trading day's curve on the following working day, so the latest close shown is normally the previous working day. Bank Rate only changes on MPC announcement days, eight times a year.

    Important information and disclaimer

    This page is provided for general information and education only. It is not financial advice, a personal recommendation, a mortgage illustration or an offer of credit. The figures are reproduced automatically from Bank of England publications and may be delayed, incomplete or contain errors, and past movements are not a guide to future rates. Albion Financial Advice Ltd accepts no liability for any loss arising from reliance on the information on this page, including where the data is inaccurate or not up to date. Always confirm current rates with your adviser or lender before making any financial decision.

    YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

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