Mortgage rate predictions 2026: Are mortgage rates going down?
Mortgage rates remain volatile in early 2026, with some lenders edging fixed rates higher after a period of intense price competition. In this guide, we break down the latest mortgage rate predictions for 2026 and 2027, whether rates are likely to go down, and what the wider UK interest rate outlook could mean if you’re buying or remortgaging.
Key mortgage rate predictions for 2026 (at a glance)
Many lenders are reversing recent price cuts, edging fixed rates higher, although fixed mortgage rates remain at their lowest level since 2022.
Experts predict mortgage rates may fall back again later in 2026, if interest rates continue to fall. Although large, sudden drops in fixed mortgage rates look unlikely as much of the predicted outlook for interest rates has already been priced into fixed mortgage deals.
If you’re remortgaging in the next six months, it makes sense to lock in a rate now (so you’re protected if mortgage rates rise) and keep it under review in case better deals appear before you complete.
What’s happening right now
Fixed mortgage rates are at their lowest levels since 2022, following intense competition between lenders and the expectation of further interest rate cuts in 2026.
In recent weeks these improvements started to slow and now more lenders are reversing some of these mortgage rate cuts, amid predictions that higher-than-expected inflation data may delay the Bank of England cutting interest rates further.
The Bank held interest rates at 3.75% on 5 February. However, while this was widely predicted, the vote was much closer than expected which may be good news for borrowers, expert say. Jump to more on this.
Mortgage rate predictions 2026
Experts predict that mortgage rates may nudge up further in the short-term, following a mortgage rates price war in late 2025 and early January 2026.
This rates war stalled after Office for National Statistics figures showed higher than expected inflation figures. Against this backdrop, more mortgage lenders started reversing cuts in mortgage rates.
However, further increases in mortgage rates aren’t a certainty. The Bank of England’s vote to hold interest rates at 3.75% in February was much closer than expected, with four of the nine members voting for a cut to 3.50%. This has led some experts to predict that further increases in mortgage rates may be limited and rates may even start to fall back.
The longer-term outlook for 2026 remains positive and experts predict fixed mortgage rates may fall back later in 2026, if interest rates continue to fall.
Moneyfacts’ UK Mortgage Trends Treasury Report says: “Expectations are high for a booming market in 2026” as figures show the choice of mortgage products has risen to its highest level in 18 years.
It also highlights that average 2 year fixed rate has plummeted from 5.48% at the start of 2025 to 4.83% at the start of 2026, while the average 5 year fixed rate fell from 5.25% to 4.91% over the same period.
Recent key developments in February 2026:
Lenders including Nationwide, Santander, Virgin Money and NatWest increased mortgage rates in February 2026. The moves came amid predictions the Bank of England may not cut interest rates as quickly or deeply as previously expected.
Mortgage rates are still highly competitive following the recent price war. Lloyds’sbest mortgage rate is now a 2 year fix at 3.55% (max LTV 60%, fee £1,199) – the last time there was a widely available 2 year fix lower than this was in September 2022.
However, when considering what’s next for mortgage rates, remember, mortgage rate predictions can shift fast and amid so much uncertainty, no one knows what’s next for mortgages, so don’t try to second-guess the market.
As Bloomberg’s John Stepek says: “If you’re set to remortgage in the coming months, it might be worth chatting to your mortgage broker, locking a rate in now, and then revisiting, just in case expectations are flipped on their heads again.” If you lock in a rate with L&C, you can keep it under review with the broker’s Rate Check service.
This uncertain mortgage picture comes as little surprise to the UK public. In our survey of 2,000 UK adults, 37% said they expected mortgage rates to rise over the next 12 months. This expectation outpaced those who believed rates would hold steady (25%) or fall (16%). Meanwhile, 22% said they simply don’t know, reflecting broader economic anxiety and confusion.
Speaking after the Bank of England held interest rates on 5 February, L&C’sDavid Hollingworth said that while the decision was widely expected, “the fact that four members of the committee voted to cut the base rate again this month should be received positively. The tone could give markets more confidence that another cut will be applied in coming months, with potential for more as the data firms up to support more reductions.“
“The consensus is currently that there could be another two base rate cuts to come this year which would bring it down to 3.25%. If that becomes a reality then fixed rates could drift down further, as those cuts feed through so shorter-term fixed rates could ease further down to 3.20-3.30%. If cuts look like they will come more quickly, more frequently, or extend into next year it could even see rates get closer to 3%.“
“However, borrowers can’t afford to be complacent as we have seen a growing number of lenders edging their fixed rates up recently. As more lenders edge rates higher it only makes it more likely that others will follow in the short term.
“This isn’t resulting in rocketing rates but does act as a sharp reminder to borrowers that things can change quickly. Today’s news may help to limit those increases if markets take the positives on board and swap rates could even ease back a touch.
“The best approach is to shop around as normal and then keep rates under review as you near completion. That protects against any rise but allows you to move to a lower rate if they do drop.“
The current expectation is that mortgage rates will gradually fall later in 2026, as interest rates are cut.
Sharp falls in mortgage rates aren’t expected as much of the predicted outlook for the base rate has already been priced into fixed rate mortgages – the cheapest 2 year fixed rate deals available are below the current base rate of 3.75%, reflecting expectations of further cuts.
Experts predict that if the base rate is cut in line with current forecasts, the best fixed mortgage rates may dip to 3.20-3.30% – or even lower if interest rates are cut faster than predicted.
However, the mortgage market is volatile and there is no guarantee that mortgage rates will fall further in 2026. If interest rates don’t fall as fast or as far as predicted, mortgage rates could edge up.
Mortgage rate predictions for 2027 and beyond
Looking further ahead, mortgage rate predictions for 2027 are very difficult to make due to the varying factors that influence what happens with mortgage rates, including what the Bank of England decides to do with interest rates.
There are varying forecasts of what’s expected to happen with interest rates in 2027. For example, Oxford Economics had predicted the base rate will eventually fall to 2.5% in 2027 and remain around that level through 2028 and 2029.
However, other analysts expect the base rate to sit higher than that level in 2027. If the base rate continues to fall in 2027, we would generally expect to see a further dip in the pricing of fixed rate mortgages.
At a glance: UK mortgage rate outlook 2026–2027
This mortgage rate outlook for 2026-2027 reflects a mix of published forecasts and market pricing available in early January 2026 (including views from Capital Economics and the OBR). Forecasts are not guarantees and can change quickly if inflation, growth or global risks shift.
Year
Bank of England base rate outlook*
Typical 5 year fixed mortgage expectation
What this likely means for borrowers
2026
Gradual easing from 3.75%, with many forecasts clustering around 3-3.5% by end-2026.
Fixed rates may edge lower but not dramatically.
Further small savings possible, but big “cliff-edge” drops in rates look unlikely.
2027
Wide range of forecasts: c.2.5–3% in some cases.
Fixed rates could dip further if base rate keeps falling.
Potentially calmer, more stable pricing – but forecasts diverge and any economic shock can reprice rates quickly.
*Forecast ranges based on market pricing and published analyst views at the time of writing.
Why fixed mortgage rates don’t just follow the base rate
It’s easy to assume fixed mortgage rates move in line with the Bank of England base rate. In practice, fixed rates are driven mainly by market expectations about where interest rates are heading.
The key factors are:
Swap rates: Swap rates are the primary benchmark for pricing fixed-rate mortgages in the UK. When swap rates rise due to market expectations of higher interest rates, lenders typically increase mortgage rates to maintain margins. Conversely, falling swap rates can lead to cheaper, more competitive fixed-rate mortgage deals. So if a base-rate cut is widely expected, fixed mortgage rates will often adjust in advance. So when the cut actually happens, fixed rates may not move much.
Gilt yields: Yields on UK government bonds influence lenders’ funding costs and investor sentiment. Falling gilt yields can help pull swap rates, and fixed mortgage rates, lower.
Market competition: When lenders compete aggressively for borrowers, they may trim margins and cut rates faster than market movements alone would suggest.
Yes, 2026 is a good time to remortgage, broadly speaking. But whether or not 2026 is a good time for you to remortgage will depend on your personal circumstances. Here’s what you need to consider:
Check your current mortgage deal’s end date: If your cheap mortgage deal ends in the next six months you should start the remortgage process. This means you can avoid rolling onto your lender’s standard variable rate (these can be as high as nearly 10%) and you may be able to save £1,000s a year by remortgaging.
Compare fixed and variable rates: You’ll need to consider what type of mortgage to choose. For example, in February 2026 the best rates on fixed mortgages are generally lower than the best rates on variable deals. But if you take out a fixed deal you’ll pay the same amount each month over the term. While if you take out a variable deal, the amount you’ll pay can go down – or up – during the term. Stay up to date in our guide to the Best mortgage rates.
If you’re on the SVR: And if you’re currently on your lender’s standard variable rate, you should urgently review your remortgage options because typical SVR rates are significantly higher than the best mortgage deals available if you remortgage.
How can I secure the best mortgage rate in the current market?
Act now: If you’ve got up to 6 months before your current mortgage deal ends you can act now. Speak to fee-free mortgage brokers L&C, they’ll scour the market to find you the best deal and can talk through options like fixed rate mortgages and tracker mortgages (more popular when rates are falling).
Lock in a rate: When rates are volatile, it’s advisable to lock into a deal now in case the best deals disappear.
Keep your rate under review: Use L&C’s online mortgage finder Rate Check service to see if there are any better options you could swap onto before your current deal ends. While other brokers charge for checking your rate is still the best one on offer, this is all part of L&C’s fee-free service.
Avoid overpaying: By starting the remortgage process early, you’ll also avoid accidentally falling onto your lender’s expensive standard variable rate.
The Bank of England held interest rates at 3.75% on 5 February, against a backdrop of inflation increasing higher than expected.
Markets had all but written off the chance of a cut this month. However, the vote was much closer than expected with the majority of five MPC members voting to hold rates, while four voted for a cut to 3.50%.
At its previous meeting on 18 December 2025, the bank cut interest rates from 4% to 3.75 in a move that was widely expected. Similarly, the vote to reduce rates was a close call at 5-4, with four members of the Monetary Policy Committee voting to hold the base rate at 4%.
The outlook for when the Bank of England will next cut interest rates is far from certain, but futures markets now assign a 65% chance of a rate cut on 19 March.
By contrast, before the Bank’s most recent decision on 5 February to hold rates at 3.75%, April was the most likely to month.
After that, the odds are highest for the June meeting to see another cut.
Economists’ interest rate predictions
Economists and investment banks across the board predict further interest rate cuts in 2026, however, interest rate predictions differ on how quickly rates may fall and how low the Bank of England may cut them:
Bank of America analysts highlighted March as the likely month for the next cut, followed by June.
ING predicts two interest rate cuts in the first half of 2026, in March and June, taking the base rate to 3.25%.
UBS expects two cuts this year, in March and June, bringing interest rates down to 3.5% and then 3.25%.
Morgan Stanley predicts three interest rate cuts in March, July and November.
Economists at Capital Economics forecast interest rates will be cut from 3.75% to 3% in 2026.
HSBC’s interest rate prediction is that the base rate will fall to 3% by the end of 2026.
But not everyone expects two or three cuts: Barclays, NatWest, Nomura and Pantheon Macroeconomics are predicting just one interest rate cut this year.
More mortgage borrowers are opting for shorter fixed deals, research by Santander found. Its research shows that in the final three months of 2024, 65% of customers opted for a 2 year fixed rate mortgage, compared to 27% choosing a 5 year fixed rate mortgage.
This is a shift because in recent years, the lender says its customers have tended to show a 60/40 split in favour of 5 year fixed rate deals.
Factors when deciding between 2 or 5 year fixed rate mortgage
You may want to fix for 2 years in the hope that mortgage rates will improve in the near future and that you’ll be able to remortgage onto a cheaper deal once your 2 year deal ends.
Choosing between a fixed mortgage, where you’ll pay a fixed rate for a set length of time, or a tracker mortgage where the amount you’ll pay will go up and down in line with the base rate, may seem like a tricky decision. You may also consider a discounted mortgage, this will track below the lender’s standard variable rate.
Fixed rate mortgages pros and cons
Pro: You’ll pay the same amount on your mortgage for a set length of time.
Pro: Your rate can’t go up which means you’ll be able to budget more easily.
Pro: In February 2026, the best mortgage rates on fixed deals are lower than the best rates on tracker deals.
Con: But if interest rates go down, your mortgage payments won’t go down in line.
Example: In February 2026, one of the best 5 year fixed rates is 3.73%. On a £200,000 mortgage over 30 years, monthly payments are £924.
Tracker mortgages pros and cons
Pro: If the Bank of England cuts interest rates, the amount you’ll pay on your mortgage will reduce.
Pro: Some tracker mortgages let you leave penalty-free during the term which means you could swap to a better deal if mortgage rates improve.
Con: Interest rates may need to be cut substantially in order for you to pay less on a tracker deal than the best fixed rate deals available.
Con: If interest rates increase in the future your payments will go up.
Example: A leading 5-year tracker in February 2026 is base + 0.60%, currently 4.35%. On a £200,000 mortgage taken out over 30 years, monthly payments are £996.
If the base rate falls from 3.75% to:
3.50%, your rate becomes 4.10%, mortgage payments will be £966
3.25%, your rate becomes 3.85%, mortgage payments will be £938
If interest rates increase, so will your mortgage payments. These examples don’t include any mortgage fees you’ll need to pay.
How do changes in interest rates affect your mortgage?
The Bank of England sets the base rate and it’s important to homeowners because it acts as a benchmark for the cost of borrowing money. As a general rule, if interest rates fall, mortgage rates will fall too.
How changes in interest rates affect your mortgage depend on your circumstances:
1. You’re taking out a new mortgage
If you’re shopping around for a new mortgage or want to remortgage, the mortgage rates available should improve if interest rates fall. Although this isn’t guaranteed as there are numerous factors that determine the rates mortgage lenders set. So it’s even more important to speak to a fee-free mortgage broker to make sure you get the best mortgage deal.
2. You’re on a fixed rate mortgage
If you’re on a fixed rate mortgage, the amount you’ll pay on your monthly mortgage payments will stay the same during your initial term – usually 2 or 5 years. So your mortgage payments won’t change if interest rates go up or down.
3. You have a tracker mortgage
There are 591,000 customers on tracker mortgages, according to UK Finance. If you’re one of them and interest rates are cut, your mortgage payments will fall as the rate you pay on your mortgage rises and falls in line with the Bank of England base rate.
For example, if you have a £200,000 mortgage over 25 years and you’re paying a rate of 5% your monthly payments will be £1,169.
But if interest rates are cut by 0.25%, the mortgage rate you’ll pay will fall to 4.75%. This means your monthly mortgage payments will fall to £1,140 – so you’ll pay £29 less per month. Find more worked tracker mortgage examples here.
4. You’re on a discounted variable rate
While if you’re on a discounted variable rate, you’ll pay a rate that’s lower than the lender’s standard variable rate. If your lender decides to pass on the cut in interest rates, your mortgage payments will fall. But it won’t necessarily pass on all or any of the cut.
5. You’re on your lender’s standard variable rate (SVR)
According to UK Finance, there are 540,000 households on their lender’s standard variable rate. If this includes you, and your lender decides to reduce its SVR if interest rates fall, the amount you’ll pay will fall. But again, the lender may not pass on all or any of an interest rate cut. And if you are on your lender’s SVR, you should know these rates can be extremely expensive, so check your deal now to see if you can save by remortgaging.
KEY INFORMATION
Which lenders have changed mortgage rates?
In February 2026, the mortgage lenders that have recently made changes to mortgage rates include:
Nationwide has increased rates across its 2, 3 and 5 year fixed rate mortgages by up to 0.19 percentage points for new and existing borrowers. For new members, the lowest rate available is a 2 year fix at 3.69%, which is available for purchases at up to 75% LTV.
Santander has raised residential and Buy to Let fixed rates. In its residential home mover range, all 75%, 85% and 90% LTV 2 year fixed rates have increased by up to 0.04 percentage points and all 60% and selected 75% LTV 3 and 5 year fixed rates will rise by up to 0.07 percentage points.
Virgin Money has hiked rates across purchase, remortgage and product transfer ranges by up to 0.15 percentage points.
NatWest has raised some of its fixed rates by 0.10 percentage points.
Principality Building Society has hiked rates on product transfers for both residential and Buy to Let borrowers. The biggest increase is to its 5 year fixed product transfers at 75% LTV for residential borrowers, which will climb by 0.25 percentage points.
Clydesdale Bank has announced increases to its residential fixed rates by up to 0.22 percentage points.
Source: L&C. Figures based on a £200,000 repayment mortgage (purchase) over 30 years. Updated: 15 Feb 2026
The lowest mortgage rate in the UK on a variable rate mortgage is currently from Halifax at 4.11% (fees £1,599). However, it’s important to remember that the rate you’ll pay on a variable rate mortgage can go up as well as down. This can make budgeting more difficult if the rate you pay increases.
Source: L&C. Figures based on a £200,000 repayment mortgage (remortgage) over 30 years. Updated: 15 Feb 2026
The best 2 year variable rate mortgage for remortgages is currently from Halifax at 4.11% (fees £1,499). Find more about our rates data and methodology here.
But remember, the rate on variable rate mortgages can go up or down. So make sure you can afford repayments if the rate you pay increases.
Also, when you’re looking for the best mortgage deals you’ll need to factor in any mortgage fees so that you can calculate which is the best mortgage deal overall. If you’re using a fee-free broker, they will do this for you.
For the best mortgage rates available for different types of mortgages, read our guide to the Best mortgage rates.
In February 2026, mortgage rates are creeping up with lenders including Nationwide, NatWest and Santander nudging up mortgage rates amid predictions the Bank of England may cut interest rates more slowly and not as far as previously expected.
However, the best fixed mortgage rates are still at their lowest level since 2022, following a recent mortgage price war.
The longer-term outlook for 2026 is that mortgage rates are expected to fall later in the year.
However, no one knows for certain what will happen next with mortgage rates or how long the current mortgage deals will be around for.
So it’s more important than ever to lock in a mortgage deal ASAP instead of holding out in case rates drop.
Timeline: Why mortgage rates have fluctuated in recent years, in detail.
December 2021: The Bank of England started hiking the base rate from 0.25%. Mortgage rates increased steadily with each increase to interest rates.
September 2022: Mortgage rates had been creeping up steadily with interest rates having increased to 2.25%. But when former prime minister Liz Truss and then chancellor Kwasi Kwarteng announced their disastrous mini-budget that included £45bn of unfunded tax cuts it caused a dramatic increase in mortgage rates.
October 2022: Inflation hits 11.1%.
2023: Mortgage rates fell, before rising again, then falling again as markets predicted the base rate had peaked and would fall in 2024.
Early 2024: Fierce competition in the mortgage market also led to better mortgage rates being available to borrowers. But in the months that followed, lenders hiked fixed rate mortgages in response to the expectation that interest rate cuts would be slower and fewer than had previously been predicted.
June 2024: With better than expected inflation figures, and an expectation the Bank of England would reduce the base rate over the summer, some lenders started to nudge down rates.
August 2024: Following August’s base rate cut from 5.25% to 5%, mortgage lenders started slashing rates on fixed deals.
November 2024: Mortgage rates on fixed deals started increasing in November 2024 despite the Bank of England’s decision to cut interest rates again to 4.75%, due to the expectation that interest rates are likely to stay higher for longer.
December 2024: Mortgage rates edged higher before nudging back down. This was despite the Bank of England’s decision to hold interest rates at 4.75% on 19 December.
January 2025: Mortgage rates edge up as markets predict interest rate cuts will be slower and shallower than previously expected.
March 2025: Average mortgage rates nudged down after several major lenders cut rates following the Bank of England’s decision to cut interest rates in February from 4.75% to 4.5%.
May 2025: A growing number of UK lenders cut mortgage rates as the fallout from US tariffs continued to fuel forecasts of deeper than expected interest rate cuts.
June 2025: With markets predicting interest rates would not be as sharply cut as previously expected, mortgage rates crept up before settling.
July 2025: Mortgage rates on fixed deals nudge down as lenders compete to trim rates. However, inflation figures for June showed an unexpected increase to 3.6%.
August 2025: The best fixed rate mortgages in the UK continued to fall as lenders cut mortgage rates ahead of the Bank of England’s interest rates announcement on 7 August. However, this vote was closer than expected, which led to many economists scaling back predictions of a further interest rate cut in 2025. While after higher than expected inflation figures for July, experts warned rate cuts on fixed deals may slow or even reverse.
September 2025: Bank of England governor Andrew Bailey warns there’s ‘considerably more doubt’ about when further interest rate cuts would be made. The best fixed rate mortgages in the UK creep up amid growing inflation fears. Bank of England holds interest rates at 4%.
October 2025: Lenders started cutting mortgage rates on fixed deals after better than expected inflation figures led to predictions that interest rates may be cut sooner than previously expected.
November: 2025 Mortgage price war heats up. Bank of England holds interest rates at 4% but considered more likely than not to cut interest rates in December. Inflation cools to 3.6%, raising hopes of a December interest rate cut. Chancellor Rachel Reeves’ Budget on 26 November not expected to reverse drops in mortgage rates as it avoided major market jitters.
December 2025: Inflation falls in November 2025 to 3.2%, lower than expected. Bank of England cuts interest rates from 4% to 3.75%.
January 2026:Figures show inflation in December increased by more than expected to 3.4%.
February 2026: Mortgage rates start edging up amid predictions the Bank of England may cut interest rates more slowly than previously expected. On 5 February, the Bank holds interest rates at 3.75%.
Historic UK mortgage rates (2000-2025)
Average mortgage rates in the UK have changed substantially over the last 25 years. This table shows how they’ve changed since 2000.
Year
2 year fix
3 year fix
5 year fix
2 year variable
2000
6.50%
6.20%
6.00%
6.30%
2001
5.80%
5.60%
5.50%
5.70%
2002
5.20%
5.00%
5.00%
5.10%
2003
4.80%
4.60%
4.50%
4.60%
2004
4.50%
4.30%
4.30%
4.20%
2005
4.40%
4.20%
4.20%
4.10%
2006
4.60%
4.40%
4.40%
4.30%
2007
5.00%
4.80%
4.80%
4.70%
2008
6.00%
5.80%
5.70%
5.60%
2009
4.00%
3.80%
3.70%
3.60%
2010
3.50%
3.30%
3.30%
3.20%
2011
3.80%
3.60%
3.50%
3.40%
2012
3.60%
3.40%
3.40%
3.20%
2013
3.50%
3.30%
3.30%
3.10%
2014
3.40%
3.20%
3.20%
3.00%
2015
3.20%
3.00%
3.00%
2.80%
2016
3.10%
2.90%
2.80%
2.60%
2017
3.00%
2.80%
2.70%
2.50%
2018
2.90%
2.70%
2.60%
2.40%
2019
2.80%
2.60%
2.50%
2.30%
2020
2.70%
2.50%
2.40%
2.20%
2021
2.60%
2.40%
2.30%
2.10%
2022
3.50%
3.30%
3.20%
3.10%
2023
3.50%
4.80%
4.70%
4.60%
2024
4.70%
4.50%
4.40%
4.30%
2025
4.90%
4.09%
4.50%
5.20%
Table data source: Statistica
Bank of England Base Rate 2020-2026
Global context and economic factors influencing UK mortgage rates
The wider global context and economic factors have an impact on mortgage rates in the UK in a number of ways, for example:
War in Ukraine
Many factors can cause inflation to rise but one major factor in recent years was Russia’s invasion of Ukraine. This is because it increased gas and oil prices, having a knock-on effect on the cost of goods.
The Bank of England uses interest rate hikes to combat inflation when it gets too high. This in turn increases mortgage rates.
Impact of Trump’s presidency
The US president’s various announcements about tariffs continue to cause economic uncertainty.
The short term impact on UK mortgage rates was for lenders to trim rates due to predictions the Bank of England would cut interest rates more frequently as a result.
However, as fears calmed, the number of interest rate cuts predicted was scaled back.
In summary: Global forces like energy prices and US monetary policy can lead to UK mortgage rates going up or down, and these factors can change quickly – reinforcing why locking in a rate and keeping it under review is so important.
KEY INFORMATION
Don’t let higher mortgage costs put you off remortgaging
It expects around 3.9 million mortgage holders to see payments rise by December 2028.
The report says: “On balance, for the typical owner-occupier mortgagor rolling off a fixed rate in the next two years, their monthly mortgage repayments are projected to increase by £64 (8%), with some households facing much larger increases.”
But if your new mortgage is going to cost more than your current one, it’s still important to start the remortgage process. If you don’t, you’ll end up on your lender’s standard variable rate which can be very expensive. So if your mortgage deal ends in the next six months, lock in a rate today then keep it under review.
Mortgage rate forecast 2026 – how much will remortgaging cost?
2 year remortgage costs now vs 2024
If you’re coming off a 2 year fixed rate mortgage, the good news is that mortgage rates are now lower than 2 years ago. The average 2 year fixed rate mortgage in February 2024 was 5.56%, according to data from Moneyfacts.
By comparison, the average 2 year fixed rate mortgage in February 2026 is 4.23%, according to Rightmove figures.
Example costs: You took out a 2 year fix when rates were expensive vs remortgaging now
Here’s how much you’ll pay at these rates in the initial term if you borrow £200,000 over 30 years:
Mortgage payment at February 2024’s average rate of 5.56%
Mortgage payment at February 2026’s average rate of 4.23%
Monthly saving if you remortgage
£1,143
£982
£161
Source data: Moneyfacts, Rightmove 30 January 2026
Worked examples for different mortgage amounts
Coming off an expensive 2 year fix
We compare what you’d pay each month at 5.56% – the average 2 year fixed rate mortgage in February 2024 with what you’ll pay each month at 4.23% – the current average 2 year fixed rate mortgage, based on a 30 year term.
Mortgage balance
Monthly mortgage payment at 5.56%
Monthly mortgage payment at 4.23%
£100,000
£572
£491
£150,000
£857
£736
£200,000
£1,143
£982
£300,000
£1,715
£1,472
5 year remortgage costs now vs 2021
The average 5 year fixed rate mortgage in February 2021 was around 2.64%. By comparison, the average 5 year fixed rate mortgage in February 2026 is 4.34%.
Example costs: You took out a 5 year fix when rates were cheap vs remortgaging now
Here’s an illustration of how much you’ll pay at these rates if you borrow £200,000 over 30 years.
Mortgage payment at February 2021’s average rate 2.64%
Mortgage payment at February2026’s 4.34%
How much more you’ll pay in February 2026
£805
£994
£189
But if you do nothing and roll onto your lender’s standard variable rate (SVR), which average 7.27%, you’ll pay much more.
Here’s how much you’ll pay on a £200,000 mortgage over 30 years at 7.27%, compared to if you remortgage at February 2026’s average 5 year fix rate of 4.34%.
Mortgage payment at February2026’s average rate 4.34%
Mortgage payments on average SVR of 7.27%
How much more you’ll pay if you move to SVR
£994
£1,367
£373
Worked examples for different mortgage amounts
Here’s an illustration of how your mortgage payments may increase if you’re coming off a cheap fixed deal.
We compare what you’d pay each month at 2.64% – the average 5 year fixed rate mortgage in February 2021 with what you’ll pay each month at 4.34% – the current average 5 year fixed rate mortgage, based on a 30 year term.
Mortgage balance
Monthly mortgage payment at 2.64%
Monthly mortgage payment at 4.34%
£100,000
£402
£497
£150,000
£604
£746
£200,000
£805
£994
£300,000
£1,207
£1,492
These tables are based on average rates; depending on your circumstances and your deposit size/ amount of equity in your home, you may get access to better rates. So speak to an expert mortgage broker, they’ll find the best deal for you.
Use our mortgage cost calculator to work out the cost of your mortgage at different rates.
Remortgaging in 2026: Our view
Paula Higgins, CEO of HomeOwners Alliance, said:
“If we’ve learned one thing in recent years it’s that no one really knows what’s going to happen next with mortgage rates.
“So don’t delay taking action. If your current deal ends in the next few months, speak to a fee-free mortgage broker who will find you the best mortgage deal for you. Then after you lock in a rate they can then keep the rate under review in case a better deal comes up before you need to switch.
“And if you’re coming off a cheap fixed rate, don’t let the higher mortgage rates available today put you off remortgaging: if you do nothing when your current mortgage deal ends and roll onto your lender’s standard variable rate you could end up paying hundreds of pounds more each month on your mortgage.”
Experts predict mortgage rates may nudge up further in early 2026 before going down steadily as the year progresses, in the expectation of further interest rate cuts.
But there are many factors at play which makes an accurate prediction difficult to make.
KEY INFORMATION
What are the UK mortgage rate predictions for the next 5 years?
This increase is due to more households coming off cheap fixed rate deals and needing to move onto more expensive rates.
Should I wait for mortgage rates to go down before getting a mortgage?
Waiting for mortgage rates to go down before getting a mortgage can be risky for a number of reasons.
Firstly, nothing with mortgages is certain. So even if experts predict mortgage rates to fall, this may not happen and rates may actually increase.
Secondly, if your current mortgage deal ends soon, if you decide to wait for mortgage rates to go down before getting a new deal and this means you roll onto your lender’s standard variable rate you could end up paying a lot more.
So if your current mortgage deal ends in the next 6 months, and certainly if it ends in the next 4 months, you should start the remortgage process now instead of waiting in case mortgage rates go down.
Product transfers are expected to be increasingly common in 2026. UK Finance, the trade body which represents the banks, said it expects product transfers will grow by 13% this year. Here’s what you should consider when deciding whether to remortgage with a different lender or your existing one.
Pros and cons of switching lenders vs staying with your current one
Switching lenders
Staying with current lender
Can you access the best mortgage rates?
Yes
Not necessarily. You’ll be limited to the rates your lender offers
Do you need a mortgage valuation?
Yes. You may need to pay for it
No
Is there legal work involved?
Yes. You may need to pay for it
No
Is there an affordability check?
Yes
Not usually if you’re borrowing the same amount for the same term
How quick is the process?
Allow 3 months
Generally around a week
When it comes to switching lenders or staying with your current one, make sure you get advice. Speak to a fee-free mortgage broker and they’ll find the best deal for your circumstances.
Mortgage cost calculator
Use our mortgage cost calculator to see instantly how much more or less you’ll pay on your mortgage if interest rates increase or decrease.
What does this mortgage rate prediction mean for first time buyers?
Move fast: If you’re in a position to buy now, act fast. When mortgage rates are volatile, you may want to move quickly to snap up the best mortgage rates if you can in case they disappear.
Work out your budget: If you’re just starting your first time buyer journey, find out how much you can afford to borrow for a mortgage and without over-stretching yourself. Read our guide on How much can I afford to borrow on a mortgage? Find out the cheapest mortgage rates whatever your deposit size (40% to 0%) in our guide to the Best first time buyer mortgage rates.
Build bigger savings: The best mortgage rates are for those with the biggest deposits. To do this, see if you could boost your deposit by saving into a Lifetime ISA. Also, go through your budget and see where you can save. As well as helping to increase your deposit it will also show lenders that you can manage your money responsibly.
Boost your credit score: Your credit rating affects whether your mortgage application will be successful and influences how much your monthly repayments will be. So it’s essential to improve your credit score before you apply for a mortgage. Read our guide 11 Tips to improve your credit score for a mortgage. Read more tips in our guide Mortgage advice for first time buyers.
Length of deal: The rate you’ll pay will also depend on how long you take your mortgage deal out for.
Fixed vs variable mortgage rates: In February 2026, the cheapest mortgage rates are available as fixed rate mortgages. However, if you take out a fixed rate mortgage, the rate you pay will be the same for the duration of the term. While the cheapest variable rate mortgages may be higher, the rate you pay may reduce (although it may increase). Find out more in our guide What type of mortgage should I get?
Is it worth speaking to a mortgage broker?
Yes, it’s always worth speaking to a mortgage broker. Not only will they be able to explain your options to you but they may also have access to exclusive deals too. But beware, some brokers charge fees. So speak to a fee-free broker like our partners at L&C.
What these mortgage rate predictions mean if you’re on a cheap deal
If you’re currently on a cheap fixed rate mortgage, these mortgage rate predictions may understandably make you feel quite anxious because you’ll likely have to pay a higher rate on your next mortgage.
The average rate on a 5 year fix in February 2026 is 4.34% which is much higher than the average rate on a 5 year fix in February 2021, which was about 2.64%.
So if you’re currently on a cheap fix, here’s what you need to do:
If your cheap fix ends soon: Start the remortgage process now. Speak to a fee-free mortgage broker who will find the best mortgage deal for you. You may need to pay more for your new mortgage than your existing one – the ultra-cheap rates we’ve seen in recent years are long-gone. But you may be able to save hundreds of pounds per month by remortgaging onto a new deal compared to if you do nothing and let your mortgage roll onto your lender’s standard variable rate.
If you’ve still got some time on your cheap deal: Take advantage of the low rate you’re currently on and make overpayments if you can. Overpaying will help to drive down the mortgage balance more quickly, which will mean a smaller mortgage when you remortgage onto a new deal. But make sure to check if your mortgage allows overpayments (most do) and also check if there are limits on how much you can overpay by to avoid having to pay an early repayment charge.
If you’re struggling to pay your mortgage you should get help as soon as possible. You’ll find useful advice on the government-backed MoneyHelper website:
1. Talk to your lender
Lenders must treat you fairly and consider any request you make to change the way you pay your mortgage.
So if the new payments are looking unmanageable ask about ways to make them more affordable such as by extending the term of your mortgage, taking a payment holiday or accepting lower payments for a while.
Some solutions will appear on your credit file so ask what the impact will be on your credit score. Although, any impact is likely to be less than if you go into arrears and miss payments without talking to your lender first, says MoneyHelper.
Paying your mortgage is a priority that you need to look at before other bills and payments. You’ll be ‘in arrears’ if you have missed two or more mortgage payments.
If this happens, within 15 working days, your lender must: tell you the total sum of your arrears, list all the payments which you’ve missed or partly paid, tell you the exact amount outstanding under your mortgage and tell you the amount of any charges incurred because of missing any payments (and indicate any charges that may occur if the arrears aren’t paid back).
However, your lender must not seek repossession unless all other reasonable attempts to resolve the situation have failed, and they must give you reasonable notice before taking that action.
If you have missed two or more mortgage payments now is the time to get debt advice. Get free and confidential debt advice from MoneyHelper.
3. Can you get government support?
Depending on your circumstances you may be able to access government benefits and support schemes.
4. What to do if someone is seeking possession of your home
Help is available from the moment you receive written notice from a creditor seeking the possession of your home, says MoneyHelper.
If you’re in England or Wales, the Housing Loss Prevention Advice Service can help you if you’re at risk of being evicted from your property because your mortgage is in arrears.
A housing expert funded by the government will work with you to identify what has triggered the possession claim and recommend solutions. They may be able to give you free legal advice on: mortgage arrears, welfare benefits payments and debt.
If you’re unable to resolve matters and you’re asked to attend a court hearing, a housing adviser can also provide free legal advice and representation at the court.
Find your nearest Housing Loss Prevention Advice Service provider by typing in your postcode and ticking the box ‘Housing Loss Prevention Advice Service’ at Find legal advice at GOV.UK
How do interest changes affect other types of borrowing?
When it comes to changes in interest rates, other types of borrowing are affected in a similar way. If interest rates go up, borrowing of any type generally gets more expensive, while when interest rates are cut, borrowing generally gets cheaper. However, this is in general terms as the amount you’ll pay on things like credit cards and loans will depend on a number of factors including your credit history.
Interest rate changes and savings
When interest rates go down, lenders usually reduce the amount of interest they’ll pay on savings accounts.
What’s happening to interest rates in other countries?
In recent years, the UK has had one of the highest interest rates in the G7. The European Central Bank (ECB) started to cut its main interest rate for the eurozone in June 2024 from an all-time high of 4%. After a series of cuts it now stands at 2%.
While the US’s central bank, the Federal Reserve, cut rates three times since September 2025, taking them to the current range of 3.5% to 3.75%, reports the BBC.
Mortgage rates and costs methodology
At HomeOwners Alliance the best mortgage rates in our tables are from fee-free mortgage brokers L&C and updated regularly. These best mortgage rates do not take into account fees and are for illustration only. The average mortgage rate figures we use are from sources including Rightmove and Moneyfacts.
What are interest rates and how does it affect me?
The Bank of England sets interest rates and it’s important to homeowners because it acts as a benchmark for the cost of borrowing money. In theory the lower the base rate, the lower mortgage rates. And if the base rate rises, the mortgage rate prediction would be for mortgage interest rates to usually rise too.
What is the current UK interest rate?
The current UK Bank of England base rate is 3.75% in February 2026.
How much is the average standard variable rate?
The average SVR in February 2026 is 7.27%. However, SVRs vary widely by lender. For example Newcastle Building Society’s SVR is currently 6.50% while Aldermore’s SVR is 8.58%.
Why do interest rates change?
The Bank of England increased UK interest rates as it tried to get surging inflation down to the government’s target of 2%.
When will UK interest rates go down further?
Yes, UK interest rates are expected to go down further. However, how far rates are cut and how quickly this will happen depends on a range of factors including what happens with inflation.
How do mortgage rates work?
The higher your mortgage rate, the more expensive your monthly mortgage payments will be and the more expensive your mortgage will be overall. The mortgage rate you’ll get access to is set by your lender and will be based on several factors including economic conditions, the Bank of England base rate, the size of your deposit (your loan to value ratio) your personal and financial circumstances (including your credit history) and type of mortgage you choose.
Are mortgage rates going down now?
In February 2026, fixed mortgage rates are edging up. However, this comes after a recent price war and fixed mortgage rates are still at their lowest level since 2022.
Will mortgage rates go down in 2026?
Fixed mortgage rates are predicted to edge up before falling back further in 2026. However, any dips are expected to be gradual and further falls are not guaranteed and will depend on wider economic factors.
What are experts expecting for UK mortgage rates in 2026?
While predictions vary, experts predict rates may nudge up further in early 2026, with the potential for a slow, steady easing in UK mortgage rates later in 2026 as the Bank of England reduces the base rate.
Key terms explained
Not sure what some of the terms mean? Here’s a quick guide to the most common mortgage phrases you’ll come across when comparing the best mortgage rates.
The percentage of the property’s value you borrow. For example, a £180,000 mortgage on a £200,000 property is 90% LTV.
APRC (Annual Percentage Rate of Charge)
The total annual cost of your mortgage over its lifetime, including interest and fees, expressed as a percentage. Useful for comparing the best mortgage rates.
Bank of England base rate
The interest rate set by the Bank of England. This directly affects tracker mortgages although fixed mortgage rates are driven more by market expectations.
Initial interest rate
The interest rate you’ll be charged for the set period at the start of your mortgage.
Initial rate period
The length of your fixed or variable rate mortgage deal before you switch to the standard variable rate.
Mortgage term
The full length of your mortgage, including any introductory term.
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