How to budget for rising bills and interest rates
If your mortgage deal is ending or your rent and bills are going up, work out what you could still afford each month. Start with what you pay now, then try a few higher costs to see when your budget stops balancing.
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Open the household budget plannerWhat changed in November?
On 5 November 2026, the Bank of England announced that Bank Rate had risen from 3.75% to 4%. The next scheduled decision is 17 December 2026. The Bank has given no schedule of further increases. Its decisions depend on how inflation and the economy develop.
Which bills could change for you?
- Fixed-rate mortgage: Your rate normally stays fixed until the deal ends. Find the end date and ask your lender what rate you would move onto if you do nothing.
- Tracker or variable mortgage: A Bank Rate tracker usually moves in line with Bank Rate under your deal terms. A lender’s standard variable rate can change separately. Check your deal and any payment notice.
- Rent and other bills: Use your tenancy agreement, renewal notices and recent statements. A Bank Rate change does not automatically change your rent, energy bill or credit card rate.
Try three higher mortgage rates
This example uses a £180,000 repayment mortgage with 25 years left and no fees. The rates below are illustrative mortgage rates. Use your own balance, remaining term and a rate from your lender or broker as your starting point.
| Mortgage rate | Monthly payment | Extra per month |
|---|---|---|
| 4.50% | £1,000 | — |
| 4.75% | £1,026 | +£26 |
| 5.00% | £1,052 | +£52 |
| 5.50% | £1,105 | +£105 |
If you have £150 left each month and housing costs rise by £105 while energy and food rise by another £60, you would be £15 short. Renters can run the same check with a possible rent increase in place of a mortgage change.
- Current monthly estimate
- £1,000.50
- New monthly estimate
- £1,105.36
- Monthly change
- +£104.86
Higher rates can help savers
Some variable savings accounts may pay more when rates rise. Banks set their own savings rates, so check what you’re earning and compare accounts using the annual equivalent rate (AER). Easy access can be useful for emergency savings. If you can put money aside for longer, compare fixed rates and check the withdrawal terms. MoneyHelper’s savings account guide
Give yourself time to act
- Use the household budgeting checklist to capture take-home pay, essential bills and irregular costs such as insurance renewals and car repairs.
- Mark the dates your mortgage deal, tenancy or tariffs are due to change. In the planner, replace today’s payments with the higher figures and see how much is left.
- If the numbers show a shortfall, check what support you could get using the benefits calculators listed on GOV.UK. MoneyHelper’s bill prioritiser explains which missed bills can have the most serious consequences.
If you think you may miss a mortgage payment, contact your lender early. MoneyHelper’s guide to rising mortgage payments explains what to ask and where to get free debt advice.