With inflation and interest rates now falling, the housing and mortgage markets are settling down, giving homeowners across the UK the stability they need for confident decision-making.
Rachel Geddes, Strategic Lender Relationship Director, Mortgage Advice Bureau, reveals where mortgage rates are heading in 2026:
Looking back on 2025
The economy in 2025 ended up being tougher than many predicted. However, with inflation now gently easing off, and interest rates on the decline, homeowners can finally have some breathing room after the rollercoaster ride of the previous two years. In short, the housing and mortgage markets are settling down, and this stability makes a big difference when it comes to decision-making.
What will interest rates be in 2026?
We can’t predict the future, but we’re fairly confident that we’ll continue to see interest rates fall as we go through the course of 2026. Many are predicting we’ll see the Bank of England reduce the base rate to 3.25 – 3.5%, but how quickly we get there will depend on how the economy performs.
With many historically low fixed-rate deals expiring next year, now is the time to get mortgage advice, especially if your circumstances have changed.
Perhaps you need to borrow more money, or maybe you’re worried that your deposit is too small, or that you have a few blips in your credit history. Whatever it is, the chances are there will be the right mortgage for your needs out there: you just need help finding it.
Homeownership is not out of reach
Following the recent Autumn Budget, there’s no denying that the Chancellor could’ve announced more for the housing industry than she did. However, what we now have is certainty, improved affordability, falling mortgage rates, and a record number of mortgage products to choose from. The fact remains: it’s a very good time to buy, so if you believe homeownership is out of reach, think again.
When is the right time to buy a first home?
With new products entering the market and recent changes to lending regulations that allow you to potentially borrow more, the pool of options available to first time buyers is now far bigger. This is great news for anyone who doesn’t believe they can get a mortgage, or has been previously declined for one.
Many renters are much closer to buying than they realise. Conditions for first time buyers have improved considerably over the last year or so, and taking that first step could be far easier than it has been for the last decade or more. With the right information, guidance, and support, the dream of homeownership is achievable.
It’s also possible to borrow quite a lot more now than last year. Therefore, you may well be able to buy your first home much sooner than you think.
Get the right advice
Speaking to an adviser sooner rather than later is key to getting to where you want to be – whether that’s buying your first home, remortgaging to a better deal, or protecting your family with the right insurance policy. You never know, you may well be able to achieve something that you thought was impossible.