It feels like a lifetime ago, doesn't it? That chaotic Friday in September 2022 when the "mini-budget" dropped and basically set the UK bond market on fire. If you were trying to buy a house back then, you probably remember the sheer panic. Lenders weren't just raising prices; they were pulling products off the shelves faster than you could refresh a browser.
Honestly, we’re still living in the shadow of that 44-day premiership. But the story has changed.
If you're looking at uk mortgage rates post-truss budget today, in early 2026, the landscape is unrecognizable from the wreckage of late 2022. We aren't in that "emergency" phase anymore. We’ve moved into something new. Something a bit more predictable, though arguably just as tough for the average person’s wallet.
The Long Road Back from 2022
When Liz Truss and Kwasi Kwarteng unveiled those unfunded tax cuts, the market didn't just disagree—it revolted. Government bond yields (gilts) spiked, and because mortgages are priced off those yields, the "Truss Premium" was born. At the peak of the madness, average two-year fixes shot past 6%.
It was a total shock to a system that had been coddled by decade-low interest rates.
Fast forward to right now. The Bank of England recently nudged the base rate down to 3.75% in December 2025. That was a big deal. It was the first time we'd seen a December cut since the year of the mini-budget itself. It signaled that the "higher for longer" era is finally losing its grip.
Today, average two-year and five-year fixed rates have finally dipped back below the 4.5% mark. According to recent data from Moneyfacts, some of the most competitive five-year deals are hovering around 4%.
That’s basically the lowest they’ve been since before the mini-budget drama began.
But here is what most people get wrong: they think "recovery" means going back to 1% or 2% interest rates. It doesn't. That world is dead. Experts like Rachel Springall from Moneyfacts have been pretty vocal about this—we are moving toward a "new normal" where 3.5% to 4.5% is actually considered a decent deal.
Why the "Truss Premium" Took So Long to Fade
You might wonder why it took nearly four years to get back to "normal" levels. It’s because the mini-budget didn't just raise rates; it shattered the UK’s reputation for fiscal stability. Investors needed a long time—and a lot of boring, predictable budgets from subsequent Chancellors—to believe that the UK wasn't a "submerging market," as Larry Summers famously put it.
Then inflation showed up.
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Even after the political dust settled, the Bank of England had to keep hiking rates to fight off double-digit price rises. We went from a political crisis to a cost-of-living crisis.
- September 2022: Mini-budget chaos, rates surge.
- 2023-2024: Persistent inflation keeps the base rate at a 15-year high of 5.25%.
- Late 2025: Inflation finally hits the 2% target, allowing the first real "easing" cycle.
- Early 2026: Market competition returns, with 7,000+ mortgage products available.
It's a lot.
The 2026 Reality: Is the "Boom" Real?
Some analysts are calling 2026 the year of the "mortgage boom." It sounds a bit hyperbolic, but the numbers sort of back it up. We’re seeing a massive wave of remortgaging—about 1.8 million fixed-rate deals are expiring this year.
That is a huge amount of money moving around.
Lenders are desperate for that business. Because they are hungry, they’re getting creative. We’re seeing "innovation" again, which is a word that usually makes people nervous, but right now it just means better options for people with small deposits.
Lloyds and Halifax have been pushing their "5.5 times income" schemes for first-time buyers. That’s a massive jump from the 4.49 multiplier that was standard for years. It’s a direct response to the fact that house prices haven't actually crashed like everyone predicted they would back in 2022. They’ve stayed stubbornly high, so the only way to help people buy is to let them borrow more.
Regional Winners and Losers
It’s not the same everywhere, though. If you’re in London or the South East, things still feel pretty grim. Affordability there is stretched to the absolute limit.
But look at the North West or Northern Ireland. Places like Belfast and Manchester are seeing modest price growth because people can still actually afford the monthly payments on a 4.5% mortgage there. In London, a 4.5% rate on a £500,000 loan is eye-watering. In the North, on a £200,000 loan? It’s manageable.
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What You Should Actually Do Now
If you are sitting on a "Truss-era" mortgage—one of those painful 6% fixes you grabbed in a panic—you’re probably counting down the days until it ends.
But don't just wait for the letter from your bank.
- Check your "Product Transfer" window. Most lenders let you lock in a new rate 4 to 6 months before your current one ends. If rates are dipping now, you might want to secure a deal today. If they drop further before your switch date, you can usually swap to the lower one.
- Look at the total cost, not just the rate. Lenders are currently playing a game where they offer a low "headline" rate (like 3.89%) but slap a £1,999 fee on it. Sometimes, a 4.2% rate with no fee is actually cheaper over two years. Do the math.
- Don't hold out for 2%. I’ve talked to so many people who are waiting for rates to "go back to normal." This is the new normal. If the Bank of England gets the base rate down to 3.25% by the end of 2026, as some predict, mortgage rates might shave off another 0.25%, but they aren't going to plummet.
- Leverage the competition. There are over 7,100 mortgage products on the market right now—the highest level since before the 2008 financial crisis. Use a broker. They can see the "under the counter" deals that aren't on the comparison sites.
The ghost of the Truss budget is finally fading, but it’s left us in a high-cost world. The panic is over, but the era of "cheap money" is definitely gone. Navigating uk mortgage rates post-truss budget in 2026 is less about avoiding a catastrophe and more about being a savvy shopper in a crowded, expensive market.
Expect the Bank of England to meet again in February and potentially April. If inflation stays quiet, we might see the base rate move toward 3.5% sooner than expected. Keep your paperwork ready and your credit score clean; in this market, the best deals go to the "simplest" borrowers.