What Will UK Mortgage Rates Be in 2026?

Most forecasts predict UK mortgage rates will gradually decline through 2026. Current 2-year fixes around 4.8% could fall to 4-4.5% by late 2026, with 5-year fixes following a similar trajectory. The Bank of England base rate is expected to settle around 3.5-4%. However, forecasts depend on inflation and economic conditions, and can change.

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Will mortgage rates go down in 2026?

Most economists expect gradual reductions through 2026 as inflation stabilises. Current forecasts suggest 2-year fixes could fall from around 4.8% to 4-4.5% by late 2026. However, forecasts depend on inflation, global events, and Bank of England decisions - they can change quickly.

What are mortgage rates expected to be by end of 2026?

Forecasts suggest 2-year fixed rates around 4-4.5% and 5-year fixes around 4.2-4.6% by late 2026. The Bank of England base rate is expected to settle around 3.5-4%. Remember these are predictions, not guarantees.

Should I wait for mortgage rates to fall before buying?

Generally no. Property prices often rise when rates fall (more buyers compete). A 0.5% rate drop on a £250,000 mortgage saves about £60/month, but if house prices rise 3% while waiting, that's £7,500 extra on the purchase price. Time in the market usually beats timing the market.

Why haven't mortgage rates dropped with base rate cuts?

Mortgage rates are influenced by swap rates (what lenders pay to borrow money) rather than just the base rate. Swap rates factor in future expectations and risk. When markets expect base rate rises or volatility, swap rates stay higher, keeping mortgage rates elevated despite current base rate cuts.

What affects UK mortgage rates?

Key factors include: Bank of England base rate, swap rates (interbank lending costs), inflation levels, lender competition, your loan-to-value ratio, and your credit profile. Global economic events and government policy also play roles.

Is now a good time to fix my mortgage?

For most people on SVR (7-8%), fixing now at 4-5% makes sense. Even if rates drop slightly, the SVR premium you're paying while waiting often exceeds future savings. Lock in certainty now and remortgage again in 2-5 years when your deal ends.

Quick Answer

UK Mortgage Rate Forecast 2026

Last reviewed: December 2025

Reviewed by Jay Sabine – CeMAP Qualified – 29 years experience

Gradual reductions expected. 2-year fixes could fall from 4.8% to around 4-4.5% by late 2026. Base rate expected to settle at 3.5-4%.

After the volatility of 2022-2024, UK mortgage rates have stabilised and are expected to gradually reduce through 2026. Current 2-year fixed rates average around 4.8%, with 5-year fixes at 4.9%. Forecasters expect 2-year rates to fall to 4-4.5% by late 2026, assuming inflation remains under control and the Bank of England continues its gradual rate reduction path. The base rate, currently around 4.5%, is expected to fall to 3.5-4% by end of 2026. However, mortgage rates won't return to the historic lows of 2021-2022 (when sub-2% deals existed) - the 'new normal' is likely 3.5-4.5% for the foreseeable future.

Rate forecasts are predictions based on current data and can change significantly with economic conditions. This is not financial advice. Your home may be repossessed if you do not keep up repayments.

Key Points

1Current 2-year fixed rates: around 4.8%
2Current 5-year fixed rates: around 4.9%
3Bank of England base rate: around 4.5%
4Expected base rate by late 2026: 3.5-4%
5Expected 2-year fixes by late 2026: 4-4.5%
6Rates unlikely to return to 2021 lows (sub-2%)

Eligibility Criteria

Understanding these forecasts can change with economic conditions
Your personal rate depends on LTV, credit score, and circumstances
Lender competition affects rates as much as base rate
Global events can rapidly shift rate expectations
Don't delay important decisions waiting for uncertain falls

Typical Timeframe

Mortgage offers typically last 3-6 months, so you can lock in today's rates now. If rates drop before completion, some lenders allow rate switches. Start your application 3-6 months before your current deal ends.

Next Steps

1Compare current fixed rate deals available to you
2Calculate whether waiting makes financial sense
3Speak to a broker about rate predictions
4Consider locking in now with a long offer validity
5Set up rate alerts for your target rate

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UK Mortgage Rate Forecast 2026

Key Points

Eligibility Criteria

Typical Timeframe

Next Steps

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