Why this matters now

  • Mortgage rates have already fallen over the past year.
  • Over 80% of mortgage holders are on fixed-rate deals, meaning many will soon need to remortgage.
  • Around 1.8 million borrowers are due to come off fixed rates this year.

That creates pressure — but also opportunity — as lenders compete for new business.

What the data shows

According to Moneyfacts:

  • The number of mortgage products available is at its highest level in 18 years.
  • Fixed mortgage rates have been falling year-on-year.
  • More rate reductions could happen early in 2026 if competition continues.

Rachel Springall, finance expert at Moneyfacts, said:

“Expectations are high for a booming market in 2026. Mortgage rates are lower year-on-year, and the choice of deals is abundant.
First-time buyers are not being left behind by this progress.”

First-time buyers: what’s changed?

Regulators have recently allowed lenders greater flexibility around affordability assessments.

That has led to:

  • Some lenders offering up to six times income borrowing (where affordability allows)
  • Low-deposit or even no-deposit products in some cases
  • More use of joint borrower, sole proprietor mortgages, allowing family members to help support affordability

At the same time, rising wages mean mortgage costs as a share of income are currently lower than in recent years for first-time buyers.

That said, property prices and limited housing supply remain major hurdles.

Could your payments change?

Many borrowers are concerned about what happens when a fixed deal ends.

For example, on a £165,000 mortgage over 20 years:

  • At 3.4%, monthly payments are significantly lower
  • At 5.5%, payments increase noticeably

Even small percentage changes can materially affect household budgets.

 

Local markets vary

Not all housing markets behave the same way.

Some brokers suggest there is pent-up demand, with buyers waiting for clarity following the Budget and the festive period.

However, others caution that predictions are uncertain and that overall sales could still soften compared with last year.

What this means for borrowers

If you are:

  • Approaching the end of a fixed-rate deal
  • Considering buying your first home
  • Thinking about moving

There may be more mortgage choice than at any point in recent years. But rates and eligibility still depend on your income, deposit size and credit profile.

This article provides general information, not personal advice. Suitability depends on individual circumstances.

Exploring your options

If you want to see what mortgage rates lenders might offer based on your situation, you can request a mortgage quote to explore options.

(Requesting a quote provides information and does not constitute financial advice or a recommendation.)