Interest Rates Have Risen to 4%. What Does It Mean for Your Practice Loans?

What did the Bank of England decide on 5 November?

The Monetary Policy Committee voted by eight to one to raise Bank Rate from 3.75% to 4%, at a meeting that ended on 4 November with the decision announced on 5 November 2026. One member, Catherine Mann, voted for a larger rise to 4.25%. It is the first increase since August 2023. The Bank's Monetary Policy Summary and minutes set out the reasons, and its page on Bank Rate confirms the new rate and the date of the next decision, 17 December 2026.

The cause is energy. The Bank's explainer on why rates have gone up says conflict in the Middle East has disrupted oil and gas supplies and pushed up prices. The ONS September inflation figures put CPI at 3.5%, up from 3.1% in August, and the Bank now expects inflation of around 4.5% in the first quarter of 2027 and around 5% in the second. We previewed the decision in our report on the November rate rise and pharmacy loans, which has now been updated with the result.

Will interest rates go up again?

Possibly, and soon. The Committee said monetary policy is “not on a pre-set path” and that it will adjust Bank Rate as needed to bring inflation back to 2%. Within that, the minutes show a range of views. Several members said a further rise could be needed in the near term if inflation does not ease, while Alan Taylor described the move as insurance and said “the next move could be up, down, or sideways”.

For a practice owner, the practical point is that the cost of variable borrowing has gone up and could go up again on 17 December. The next ONS inflation figures, for October, are due on 18 November. If you are planning a purchase, a buy in or a fit out in the next few months, plan on rates being at least where they are now. Our page on managing cash flow covers how practices plan for higher costs.

How much more will my practice loan cost?

A quarter point rise adds about £250 a year in interest for every £100,000 of variable borrowing that tracks Bank Rate. These illustrations show what that means on typical professional practice facilities, before any change in the lender's margin.

• £800,000 dental practice purchase loan. About £2,000 a year, or around £167 a month.
• £1.5 million veterinary practice loan. About £3,750 a year, or around £313 a month.
• £2 million care home premises loan. About £5,000 a year, or around £417 a month.
• £250,000 law firm revolving facility, fully drawn. About £625 a year.
• £150,000 physiotherapy clinic fit out loan on a variable rate. About £375 a year.

The rate is only one part of the cost. Arrangement fees, the lender's margin and the term matter as much, and the gap between lenders on the same deal is often worth more than a quarter point. Our guide to what practice purchase finance costs explains each part, and the practice purchase loan calculator and partner buy in loan calculator let you run your own numbers at the new rate.

Which practice loans change and which do not?

Variable loans priced as a margin over Bank Rate or SONIA move with the rate, usually from the next interest period. That often includes practice acquisition loans, goodwill loans, premises loans, overdrafts and revolving working capital facilities. Check your facility letter for the basis of the rate and any floor.

Fixed-rate borrowing you have already signed does not change. Most unsecured practice loans are fixed for the term, and so are most hire purchase and lease agreements for equipment, IT and software and refurbishment. Our guide to hire purchase and leasing explains the difference. Short term funding for a PII premium or a tax bill is usually priced when you take it, so new agreements will reflect current rates but existing ones will not move.

Does a higher rate change what lenders will lend?

It can, at the margin. Lenders test whether a practice's profit covers the repayments with room to spare, and a higher rate means a higher repayment on the same loan. A deal that only just passed at 3.75% might need a slightly bigger deposit, a longer term or more deferred consideration from the seller at 4%. Well run practices with steady income should notice little difference, and lenders that specialise in professions have not stopped lending because of a quarter point.

What helps most is a strong application. Lenders move faster when you arrive with recent accounts, management figures, a clear plan and an honest view of existing debt. Our guide to preparing a practice finance application lists what to gather, and our explainer on personal guarantees, credit scores and mortgages covers what owners sign up to.

Should I fix my practice loan now?

A fixed rate gives certainty over repayments for the fixed period, which is worth a lot when budgets are already under pressure from wages, energy and supplier costs. The trade off is that fixed deals often carry early repayment charges, and lenders price new fixes off market rates that already expect further rises. Ask for fixed and variable quotes on the same deal and compare the total cost over the years you expect to keep the loan.

If you hold several variable facilities, this is a good moment to look at refinancing. Bringing them into one loan, fixing part of the debt, or moving an expensive overdraft onto a term loan can steady the monthly outgoings. Our refinancing hub explains how lenders assess a switch. Check the early repayment charge and arrangement fee before you decide.

What does it mean for dentists, vets, law firms and other practices?

• Dental and veterinary practices. Purchase loans are large and often variable, so buyers should get current quotes rather than rely on one from last month. See dental practice loans, buying a dental practice, veterinary practice loans and buying a veterinary practice.
• Law and accountancy firms. Overdrafts and revolving facilities used to carry work in progress will cost more, so WIP finance and tighter billing matter more. See solicitor practice loans and our guide to reducing lock up.
• Care providers. Premises loans on care homes are often large and variable. See care provider finance.
• Physiotherapy, chiropractic and other clinics. Fit outs and equipment are usually fixed, but a variable premises loan will move. See physiotherapy and chiropractic clinic finance.
• Architects and other consultancies. Cash flow between fee stages often runs through an overdraft. See architect practice loans.

Tax bills are another pressure. If a January payment on account or a VAT quarter lands while the overdraft is already costing more, partners tax funding, VAT funding and corporation tax funding can spread the bill at a cost agreed up front. Our report on what Budget 2026 changed for practices covers the other changes owners face this year.

What it means for your funding

The rise to 4% makes variable practice borrowing a little dearer, and the Bank has been clear that it could rise again. It does not change lenders' appetite for well run practices. If you are buying, get fresh quotes, ask for fixed and variable options and test the deal at a higher rate. If you already have practice debt, list each facility, whether it is fixed or variable and when it ends, and look at whether refinancing would steady the repayments before 17 December.

We are a broker, not a lender. We search the whole of the market for practice refinance, acquisition finance, partner buy in finance and working capital, and approach the lenders that suit your practice. Fees depend on the lender. Instant Quotes shows which lenders on our panel fit your practice, with no credit check. See how it works, the buying a practice stage, or read more practice finance news.

Common questions

Published 6 November 2026. Figures and dates are taken from the sources named and were correct on that date. This article is for general information only and should not be treated as legal, tax, accounting or financial advice. Funding availability and lender requirements depend on individual circumstances.