A November Rate Rise Is Now on the Table. What 0.25% or 0.5% More Does to Your Buy-to-Let.
RealYield Team
Property Analyst
Three of the people who vote on UK interest rates have, within the space of a fortnight, all pointed in the same direction: up. Clare Lombardelli and Sarah Breeden, the Bank of England's two Deputy Governors, both voted to hold Bank Rate at 3.75% on 17 September. Both have since signalled that a rise could be needed if energy-driven inflation keeps building. Governor Andrew Bailey has been reported making similar noises. None of that guarantees a rise at the next decision, on Thursday 5 November, and this article isn't going to pretend it does. What it will do is work out, in pounds and pence, what a 0.25 or 0.5 percentage point move actually costs on a typical buy-to-let mortgage, and why fixed-rate borrowers are already feeling part of it whatever the MPC decides.
What's actually changed since the 17 September hold
The September decision itself was closer than expected: a 6-3 vote, with three members wanting a rise straight to 4.0%. Lombardelli and Breeden were both in the majority that held. On 24 September, in a speech at a conference in Poland, Lombardelli said Bank policy "will be tightened further if needed", language that reads differently depending on which way you expect the next surprise to come from, but which the market took as hawkish. The Bank's own forecast has inflation running at roughly 3.7% in the final quarter of 2026 and climbing further, to around 4.2%, in the first quarter of 2027.
Breeden was reported the same week, via Reuters, warning of "sparks in the tinderbox" on inflation risk. Bailey was reported a day later, also via Reuters, as saying it was getting harder to maintain a wait-and-see stance. A third Deputy Governor, Dave Ramsden, has also been reported, in two independent accounts, as saying the Bank may need to raise rates if upside inflation risks keep building, though no Bank of England text confirming that has been found, so it should be read as reported commentary rather than a direct quote.
Frequently Asked Questions
Will the Bank of England raise interest rates in November 2026?
Nobody can say with certainty. Deputy Governors Clare Lombardelli and Sarah Breeden, who both voted to hold Bank Rate at 3.75% on 17 September, have since signalled that energy-driven inflation could force a rise, and Governor Andrew Bailey has been reported making similar comments. Several economics teams, including Capital Economics, Oxford Economics, Fidelity International and Bank of America, now expect a 0.25 percentage point rise at the 5 November meeting, while others, such as AJ Bell, think the Bank could hold through the rest of 2026. The next decision, with a full Monetary Policy Report, lands on Thursday 5 November.
How much would a 0.25 or 0.5 percentage point rate rise cost on a buy-to-let mortgage?
On a £200,000 interest-only loan, a straight 0.25 percentage point rise adds £500 a year, or about £41.67 a month, to the interest. A 0.5 percentage point rise adds £1,000 a year, or about £83.33 a month. That's the mechanical effect for a tracker or Standard Variable Rate mortgage, where the rate moves in step with Bank Rate. Fixed-rate borrowers don't feel a Bank Rate change directly, but their remortgage pricing is already being shaped by swap rates that move ahead of the MPC's decision.
Why do fixed buy-to-let rates move before the Bank of England actually decides anything?
Fixed-rate mortgages aren't priced off Bank Rate. They're priced off swap rates, which reflect where the market expects interest rates to average out over the life of the fix. If enough of the market expects a rise in November, swap rates move up in anticipation, and lenders reprice their fixed products accordingly, days or weeks before the MPC meets. That's why someone remortgaging in October can already be quoted a higher rate than someone who fixed in August, regardless of what the Bank actually decides on 5 November.
Has the 5.5% interest cover ratio stress test floor changed?
No. The Prudential Regulation Authority's 5.5% stress rate floor under Supervisory Statement SS13/16 is unchanged. But lenders test against the higher of that floor or the actual product rate, and the average five-year buy-to-let fix (5.70% as of early September) is already above 5.5%. For anyone remortgaging onto a fix priced above the floor, further rises in the actual rate now flow straight into the affordability calculation, not just the monthly cost.
What ICR threshold applies to a buy-to-let remortgage?
Basic-rate taxpayers and most limited company borrowers typically need rent to cover 125% of the stressed interest. Higher-rate taxpayers holding property in their personal name typically need 145% cover. Both are set by individual lenders under the PRA's framework and can vary, but these are the standard figures used across most of the market in 2026.
Should I fix my buy-to-let mortgage now or wait to see what the Bank of England decides?
This is a decision for you and, ideally, a whole-of-market broker, not something a general article can answer. What's worth knowing is that most lenders let you reserve a fixed rate three to six months ahead of your current deal ending and will move you onto a lower rate if one becomes available before completion. That structure lets you lock in protection against a rise without being penalised if rates ease instead.
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