UK inflation jumps to 3.5%. What a November rate rise would add to a tracker mortgage
UK inflation rose to 3.5% in September. See what a 0.25 point Bank Rate rise adds to a £200,000 tracker, and what an overpayment is worth at the higher rate.
UK consumer price inflation rose to 3.5% in the 12 months to September 2026, up from 3.1% in August, the Office for National Statistics reported on 21 October 2026.
Fuel did most of the lifting
Transport made the largest upward contribution, led by motor fuels. Goods inflation rose from 2.7% to 3.2%, its highest since September 2023, and services inflation from 3.4% to 3.7%. Core CPI, which leaves out energy, food, alcohol and tobacco, went from 2.6% to 2.8% (ONS, 21 October 2026).
That puts inflation further above the Bank of England's 2% target. Bank Rate has been 3.75% since the Monetary Policy Committee held it on 17 September, and the next decision is due on 5 November.
After the figures, AJ Bell's Danni Hewson said market expectation of a November increase was "nearing 100%", with more than a 50% chance of a second rise before the end of the year (Euronews, 21 October 2026).
Tracker borrowers feel a change first. Their rate sits a set margin above Bank Rate and moves with it.
What a 0.25 point rise does to a tracker
The Mortgage Payment calculator, free in the Stresst app, takes a loan amount, an interest rate and a term. It shows the monthly payment on a repayment basis and on interest only, side by side, with the total interest over the term.
Take an illustrative £200,000 balance with 22 years left, on a tracker at Bank Rate plus 1 point. Today that is 4.75%, and the calculator gives a repayment of £1,223 a month, with £122,739 of interest over the remaining term.
At 5.00%, after a 0.25 point rise, the payment becomes £1,251. That is about £28 a month more, and total interest climbs to £130,148, up £7,409.
If a second rise followed, 5.25% would mean £1,279 a month, about £56 above today, and £137,646 of interest.
On interest only, the same loan goes from £792 to £833 a month after the first rise.
What an overpayment is worth at the higher rate
The other side of a higher rate is that every pound paid off early saves more interest. The Periodic Overpayment calculator, also free, shows how much. You enter the balance, rate and remaining term, then an overpayment amount and how often you make it: monthly, quarterly, twice yearly or once a year.
Keep the £200,000 over 22 years at 5.00%, with an illustrative £2,000 overpayment once a year, such as a bonus. The calculator shows 17 overpayments totalling £34,000, the mortgage cleared 4 years sooner and a projected interest difference of £26,602.
Run the same pattern at today's 4.75% and the interest difference is £24,842. The same £2,000 a year is worth about £1,760 more at the higher rate.
Change the frequency to £500 every quarter, still £2,000 a year, and the result moves to 71 overpayments totalling £35,500, 4 years 2 months sooner and a projected interest difference of £27,672. The money goes in earlier, so it stops interest building sooner.
Run your own numbers in Stresst
Every figure in these examples came out of the Stresst app. Put in your own balance, rate and term, and in a couple of minutes you'll see what a rate rise would add and what an overpayment would take off.
Mortgage Payment and Periodic Overpayment are both free, along with the Overpayment calculator, the Remortgage Calculator and the Stamp Duty Calculator. UK Affordability and the Rate Break-Even Analyser are part of Premium, which also lets you export any calculation as a PDF. You can try Premium free for 7 days.
The Bank of England announces its decision on 5 November, so download it now and have your numbers ready before then. On iPhone, Stresst is available as a beta through Apple's TestFlight app.
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Sources
- Office for National Statistics, "Consumer price inflation, UK: September 2026", 21 October 2026. https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/september2026
- Bank of England, "Interest rates and Bank Rate", accessed 22 October 2026. https://www.bankofengland.co.uk/monetary-policy/the-interest-rate-bank-rate
- Euronews, "UK inflation jumps more than expected fuelling rate hike expectations", 21 October 2026. https://www.euronews.com/2026/10/21/uk-inflation-jumps-more-than-expected-fuelling-rate-hike-expectations
This article is general information only and is not financial, tax or legal advice.