Where next for interest rates?

Where next for mortgage rates?

As a general rule, if the Bank of England moves interest rates, mortgage rates follow. Ultimately, however, it is up to lenders to decide the rates they offer and changes to mortgage deals can often run ahead or behind changes in the Bank rate.

Anyone looking for a mortgage recently will have found that variable rate mortgages – where the rate moves directly in line with the Bank Rate – have become significantly cheaper than fixed rate deals. This reflects the expectation that rates will rise.

The best rate on a five-year fixed rate mortgage is currently 4.8%. In March 2026 the best deal was just 3.75%. Average two- and five-year fixed mortgage rates are around 6%.

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Where next for savings rates?

Savings rates have climbed in line with the rise in interest rate expectations, although rates are ultimately set by account providers based largely on competition in the savings market.

The best rate currently available for Cash ISA accounts is 4.77%, but this includes a time-limited boost which falls away after a year.

Cash options – the best ways to save

There are a number of potential homes for money if you decide to hold it in cash.

It makes sense to shield your cash returns from tax if you can, which means using part of your £20,000 annual ISA allowance to hold cash. Cash ISAs do the job – although any allowance you use for cash cannot then be used for investments.

There are ways to hold cash-like assets in investment ISAs too. Money market funds work a bit like variable-rate savings accounts. They are very low risk and aim to track UK interest rates, although they do not benefit from the same protections as bank deposits.

Non-ISA cash accounts also exist but returns will be taxed, subject to certain allowances. The rate of tax savers face is going up in April 2027.

For this reason, some savers choose Premium Bonds. The prize fund rate currently stands at 4.35%, but this is not guaranteed – and you actually need above average luck to achieve this rate of return.

Fidelity: current interest rates we pay on cash 

Here are the current interest rates we pay on cash held in our accounts. This includes our – 

• ISA (including Junior ISA)
• Investment Account
• Cash Management Account
• SIPP (including Junior SIPP)

Please note that interest rates can be changed at any time and the rates below have been applied since 1 November 2026.