The Bank of England has left interest rates on hold at 3.75% as expected, but most lenders decided to hike mortgage costs before the decision, with NatWest and Halifax following this week

NatWest and Halifax have increased mortgage costs after the Bank of England kept interest rates on hold.

The average rate for a two-year fixed mortgage came in at 4.53% this week, unchanged from the previous week, according to data from Uswitch.

The average five-year fixed deal came in at 4.94%, lower than last week’s 4.98%. These are the average rates across all lenders for a 75% loan-to-value (LTV) mortgage, meaning buyers need a down payment of at least 25% of the purchase price.

The Bank of England has left interest rates on hold at 3.75% as expected, but most lenders decided to hike mortgage costs before the decision, with NatWest and Halifax following this week.

Higher mortgage costs come as some 5,160 homeowner mortgaged properties were repossessed last year, marking a 39% jump compared with 2024, according to figures from a banking and finance industry body. In 2024, 3,710 homeowner mortgage repossessions took place.

Despite the annual increase, overall repossession numbers remain lower than long-term averages, the report said.

The annual total for 2025 is significantly lower than the 44,100 homeowner repossessions that occurred in 2009, amid the fallout from the financial crisis.

In the fourth quarter of 2025, 1,210 homeowner repossessions were recorded, marking a 17% increase compared with the same period in 2024, but 13% lower than the number of homeowner repossessions in the previous quarter.

Looking at mortgage arrears, 80,490 homeowner mortgages were in arrears of 2.5% or more of the outstanding balance in the fourth quarter of 2025. This was 4% lower than the previous quarter and 13% lower than in the same period in the previous year.