After a challenging 2025, marked by rates not coming down quite as quick as many had hoped, 2026 offers a more stable outlook for buyers and remortgages as the market begins to adjust.
In December, after a reduction in the Bank of England base rate to 3.75%, we saw a lot of mortgage lenders reduce their rates, signalling increased competition and a shift towards more affordable deals for borrowers.
What could 2026 look like?
According to many mortgage specialists, it is predicted that rates will continue to fall over the upcoming months, easing lending conditions and pushing more onto the property ladder.
The latest inflation data released showed a reduction in January to 3%, reinforcing the case for a further Bank of England base rate cut in March.
We have already seen lots of lenders such as Santander, NatWest and more drop their rates to match interest rates.
What does this mean for mortgages?
Lower interest rates generally mean lower monthly repayments, making it easier for borrowers to qualify for mortgages and to afford larger loan amounts. For those remortgaging, it could also provide an opportunity to secure a better deal and reduce monthly costs.
However, it’s important to remember that even with falling rates, lenders still consider affordability carefully. Mortgage approval will still depend on factors such as income, credit history, and existing debt levels.
What is the relationship between interest rates and inflation?
Interest rates are often adjusted to control inflation. When inflation is high, interest rates are increased to slow down spending and reduce price pressures.
With inflation currently on the fall, the Bank of England may feel more confident in reducing rates further, which is why the market is currently optimistic.
What can you do, looking ahead at 2026?
There are lots of steps to consider depending on any stage of your mortgage journey.
- Review your current deal. If you are coming to the end of your fixed rate mortgage, now could be the time to switch to a different deal.
- Consider remortgaging. If the interest rates continue to fall, now could be a good to time to secure a better deal and remortgage.
- Speak to a mortgage adviser. A mortgage adviser can help you to get to know you and secure the best deal for you and your circumstances.
Get in touch
With the constantly evolving economic conditions, it can be challenging to know which option is best for your circumstances.
At PM+M, our expert mortgage director, Mark Chadwick, can offer you tailored recommendations on the most suitable mortgage products based on your circumstances and the latest rate developments.
For further advice and to explore your options, please contact Mark Chadwick by clicking the button below.
PM&M Mortgages Ltd is an Appointed Representative of The Right Mortgage Ltd, which is authorised and regulated by the Financial Conduct Authority.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
