Fixed Rates Just Erased Six Months of Cuts
If you have a bridge maturing this autumn, the product you were planning to land on has quietly repriced against you.
Average two-year fixed mortgage rates have gone from 4.85% in February to 5.63% in August, a rise of 78 basis points. Five-year fixes moved from 4.94% to 5.66%. At 95% LTV the move is sharper still, with two-year rates going from 5.42% to 6.2%. The figures come from Moneyfacts, reported on 10 August.
Rachel Springall of Moneyfacts described what happened plainly: "Lenders were somewhat forced to U-turn on fixed rate cuts in July, knocking back the short-lived progress of three consecutive months of reductions."
Three months of cuts, undone in about six weeks.
Why it reversed
Two things moved, and they moved in the same direction.
On 30 July the Monetary Policy Committee held Bank Rate at 3.75%, but the vote is the part worth reading. It split 6-3, and the three dissenters were not arguing for a cut. Megan Greene, Catherine Mann and Huw Pill all voted to raise Bank Rate by 0.25 percentage points, citing second-round effects and inflation that has sat above target for years.
Then on 19 August the ONS confirmed the reason they were worried. CPI rose to 2.9% in the 12 months to July, up from 2.6% in June, with the largest upward contributions from housing and household services. The Committee had already flagged that energy prices would push inflation higher later in the year.
Swap markets price the future, not the present. When three of nine committee members are voting for a hike and the inflation print goes the wrong way, the cost of fixed-rate money rises whether or not Bank Rate moves at all. That is what the last six weeks were.
The next decision is 17 September.
What this does to an exit
A bridge is priced monthly and an exit is priced annually, so a shift in term rates does not change what you are paying today. It changes what you are paying for the next two to five years, which is a much larger number.
Take a straightforward case. A £750,000 exit onto a two-year fix at February's average of 4.85% costs roughly £36,375 a year in interest. The same loan at August's 5.63% costs roughly £42,225. That is around £5,850 a year, or £11,700 across the fix, for having refinanced in August rather than February.
Nobody could have timed February. That is not the point. The point is the direction of the error. For most of the past two years, waiting was free or better than free, because rates drifted down while you thought about it. That stopped being true in the spring, and the last six weeks confirmed it. Delay now has a price, and the price is visible.
Meanwhile the bridge itself got cheaper and quicker
Here is the part that makes this actionable rather than merely gloomy. Short-term specialist money moved the other way in the same period.
Bridging Trends Q2 2026, published 25 August, put the average monthly bridging rate at 0.81%, down from 0.82%, with average completion time falling from 53 days to 46. Lenders have been widening criteria rather than tightening: CHL expanded its bridging proposition to a broader range of adverse credit on 21 August, and funding lines behind specialist lenders keep growing, with Lloyds and NatWest committing £550m to a single lender and Shawbrook raising Hope Capital's facility to £50m.
So the short end is competitive and fast. The long end is repricing upward. If you are between the two, that combination has consequences.
Three practical consequences
Bring the exit forward if it is nearly ready. Not because rates will definitely rise again, but because the risk is now asymmetric. Six months ago the downside of waiting was missing a cut. Today the downside of waiting is a hike, and the MPC minutes tell you three members already want one.
Check whether you need to refinance the whole balance at all. If your existing term debt was written before February it is cheaper than its replacement. Second charge bridging more than doubled its market share last quarter for exactly this reason, and United Trust Bank reintroduced 90% LTV second charge lending on 3 August. Leaving cheap money undisturbed and taking a second charge behind it is often the cheaper structure now.
If the exit was a sale, price the alternative before you need it. Slower sales are precisely what pushed chain break finance to 18% of the bridging market last quarter. Knowing today what a refinance exit would cost, and whether you would qualify, is what stops a missed completion turning into a missed exit deadline.
What we would want to know about your case
Three things decide whether acting now beats waiting, and none of them are the headline rate.
The first is your maturity date, because everything is measured backwards from it. The second is whether your current term debt carries an early repayment charge, since that number often decides between a full refinance and a second charge. The third is whether the exit is a sale or a refinance, because a sale-dependent exit in a slow market is the one that needs a fallback priced in advance.
Our guides on refinancing an existing bridging loan and selling versus refinancing cover how lenders weigh each of those.
If you have a bridge maturing in the next six months, send us the maturity date and the current balance. Talk to The Finance Brokers and we will tell you what the exit looks like at today's pricing, and whether it is worth moving before September's decision.