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Mortgage rates are falling after recent hikes, but the outlook remains uncertain. We break down the latest mortgage rate predictions for 2026 and 2027, and what the wider UK interest rate outlook could mean if you’re buying or remortgaging.
Yes. Many lenders have cut fixed mortgage rates in recent weeks. However, while experts forecast that rates may continue to fall, the outlook remains uncertain.
KEY INFORMATION
Get fee-free mortgage advice from the award-winning expert advisers at Mortgage Advice Bureau.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Please note some branches of Mortgage Advice Bureau may charge a fee for mortgage advice if you go direct. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed. So make sure you use this site, this form or phone number for fee-free advice.
| Latest mortgage market update (7 July 2026) | Latest |
|---|---|
| Bank of England base rate | 3.75% |
| Average 2 year fixed rate | 5.55% |
| Average 5 year fixed rate | 5.54% |
| Latest lender changes | Nationwide (fourth cut in a month); Yorkshire BS (second cut in a week); recent reductions from NatWest, Barclays, TSB and Santander |
| Market expectations | Interest rates expected to remain at 3.75% for the rest of 2026 |
| Next Bank of England decision | 30 July 2026 |
| Current outlook | Many experts think mortgage rates could continue to edge down, but the outlook remains uncertain. |
Speaking on 7 July 2026, our Mortgage Expert Sarah Tucker said: “We are seeing the beginnings of a mortgage price war, which is welcome news for borrowers after a prolonged period of higher rates. Six lenders reduced mortgage rates in 24 hours: Nationwide, Virgin Money, BM solutions, Halifax, Kensington and Lloyds, which also layers in a further 20 basis points discount for its Lloyds Premier customers.”
“Lenders are cutting fixed rates because swap rates, which reflect what the financial markets expect interest rates to do in future, have been falling, which is reducing funding costs for lenders. We also know that there are a lot of remortgages coming up in the second-half of this year, so lenders will want to be competitive.
“There is optimism around mortgage pricing and that could improve further is swap rates keep coming down. But don’t try to time the market. Instead, if you’ve got a remortgage coming up, now is a brilliant time to secure a rate. If mortgage rates do go up again, you’ll have that rate locked in and if rates continue to come down, you can change your rate all the way up until completion.”
Experts had predicted that the brighter rate outlook forecast prior to the Middle East conflict would see more base rate cuts in 2026. Had this happened, it was predicted that fixed mortgage rates could fall to 3.20-3.30% and there was even some speculation fixed mortgage rates close to 3% may have been a reality.
However, the recent unrest has ripped up those forecasts in the near term and underlines the risks in pinning hopes on market predictions, say experts. Instead, it’s advisable 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.
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.
Predicting mortgage rates over the next couple of years has become more difficult. Recent events in the Middle East have pushed up oil and gas prices and caused financial markets to reassess how quickly interest rates may fall, making the outlook for 2026 and 2027 more uncertain.
Based on market expectations and economists’ forecasts in July 2026:
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:
We regularly review the latest forecasts from economists, lenders and financial markets, together with Bank of England guidance and market data, to explain what could happen to mortgage rates.
Get fee-free mortgage advice from the award-winning expert advisers at Mortgage Advice Bureau.
For many borrowers, 2026 could be a good time to remortgage, but it will depend on your personal circumstances. Here’s what you need to consider:
The best mortgage depends on your personal circumstances. The award-winning expert advisers at Mortgage Advice Bureau will find the right mortgage for you.
Get fee-free mortgage advice from the award-winning expert advisers at Mortgage Advice Bureau.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Please note some branches of Mortgage Advice Bureau may charge a fee for mortgage advice if you go direct. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed. So make sure you use this site, this form or phone number for fee-free advice.
The conflict in the Middle East has had a major impact on interest rate predictions in the UK.
Interest rate predictions are notoriously difficult at the best of times, but the complexity of the current situation in the Middle East makes it even harder. Forecasts for what’s next for interest rates vary considerably.
However, what happens with interest rates in 2026 will depend on numerous factors. You can keep up to date by bookmarking our guide to best mortgage rates in the UK or signing up to our weekly newsletter.
Shorter mortgages are becoming more popular, according to research by MoneyFacts. It found the number of people comparing 2 year fixed rate mortgages increased from 48.4% in February 2026 to 55.6% in May 2026, while demand for 5 year fixed deals fell from 27.7% to 21.8% over the same time. Searches for 10 year fixed rate mortgages also eased, falling from 6.5% to 4.5%.
Whether a 2 or 5 year fixed rate mortgage is best for you will depend on your circumstances.
Get fee-free mortgage advice from the award-winning expert advisers at Mortgage Advice Bureau.
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.
Example:
In July 2026, one of the lowest rates on a 5 year fixed rate mortgage is 4.33% (plus mortgage fees). On a £200,000 mortgage over 30 years, monthly payments would be £998.
Example:
A leading 5-year tracker in July 2026 is base + 0.60%, currently 4.35%. On a £200,000 mortgage taken out over 30 years, monthly payments would be £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
But if interest rates increase, so will your mortgage payments. These above examples don’t include any mortgage fees you’ll need to pay.
The best mortgage depends on your personal circumstances. The award-winning expert advisers at Mortgage Advice Bureau will find the right mortgage for you.
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 depends on your circumstances:
If you’re shopping around for a new mortgage or want to remortgage, generally speaking, 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 important to get fee-free mortgage advice to make sure you get the best mortgage deal for you.
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.
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.
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.
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
In July 2026, competition between lenders has intensified, with several reducing rates multiple times in recent weeks as the mortgage price war gathers pace. The mortgage lenders that have recently made changes to mortgage rates include:
Stay up to date about the cheapest mortgage rates currently available with our Best mortgage rates guide.
Here are the latest UK mortgage rates if you’re looking for a 2 or 5 year fixed rate mortgage or a 2 year variable rate deal.
| Lender | Initial Rate | Fees | Monthly Payment | APRC | Annual Cost | Max LTV | Rep. Example |
|---|---|---|---|---|---|---|---|
| Danske Bank | 4.13% | £1,124 | £974 | 6.0% | £11,745 | 60% | Details |
| Halifax | 4.13% | £1,099 | £974 | 6.9% | £11,733 | 60% | Details |
| Nationwide BS | 4.24% | £1,014 | £988 | 6.2% | £11,852 | 60% | Details |
| NatWest | 4.25% | £1,025 | £989 | 6.5% | £11,879 | 60% | Details |
| NatWest | 4.25% | £1,525 | £991 | 6.6% | £11,909 | 60% | Details |
| Lender | Initial Rate | Fees | Monthly Payment | APRC | Annual Cost | Max LTV | Rep. Example |
|---|---|---|---|---|---|---|---|
| Bank Of Ireland | 4.35% | £1,705 | £1,003 | 6.8% | £12,130 | 60% | Details |
| Monmouthshire BS | 4.38% | £1,010 | £1,003 | 7.7% | £12,045 | 60% | Details |
| Bank Of Ireland | 4.39% | £1,205 | £1,005 | 6.7% | £12,157 | 60% | Details |
| HSBC | 4.40% | £999 | £1,006 | 6.1% | £12,068 | 60% | Details |
| Virgin Money | 4.41% | £2,024 | £1,012 | 6.4% | £12,154 | 75% | Details |
| Lender | Initial Rate | Fees | Monthly Payment | APRC | Annual Cost | Max LTV | Rep. Example |
|---|---|---|---|---|---|---|---|
| Halifax | 4.17% | £1,099 | £979 | 6.1% | £11,762 | 60% | Details |
| Barclays Bank | 4.23% | £1,004 | £986 | 5.3% | £11,852 | 60% | Details |
| Danske Bank | 4.25% | £1,124 | £988 | 5.6% | £11,880 | 60% | Details |
| Santander UK Plc | 4.29% | £1,724 | £995 | 5.9% | £11,937 | 60% | Details |
| Halifax | 4.29% | £100 | £988 | 6.1% | £11,872 | 60% | Details |
| Lender | Initial Rate | Fees | Monthly Payment | APRC | Annual Cost | Max LTV | Rep. Example |
|---|---|---|---|---|---|---|---|
| Bank Of Ireland | 4.44% | £1,705 | £1,014 | 6.2% | £12,205 | 60% | Details |
| HSBC | 4.46% | £999 | £1,013 | 5.7% | £12,153 | 60% | Details |
| Principality BS | 4.46% | £1,572 | £1,015 | 5.9% | £12,197 | 65% | Details |
| Bank Of Ireland | 4.46% | £1,205 | £1,014 | 6.1% | £12,204 | 60% | Details |
| Monmouthshire BS | 4.47% | £1,010 | £1,014 | 6.8% | £12,170 | 60% | Details |
| Lender | Initial Rate | Fees | Monthly Payment | APRC | Annual Cost | Max LTV | Rep. Example |
|---|---|---|---|---|---|---|---|
| Halifax | 3.96% | £1,599 | £957 | 6.9% | £11,525 | 60% | Details |
| Barclays Bank | 3.99% | £1,104 | £958 | 5.7% | £11,554 | 60% | Details |
| Nationwide BS | 4.02% | £1,014 | £962 | 6.2% | £11,544 | 60% | Details |
| Santander UK Plc | 4.03% | £1,224 | £962 | 6.1% | £11,660 | 60% | Details |
| HSBC | 4.05% | £1,016 | £965 | 6.1% | £11,409 | 60% | Details |
| Lender | Initial Rate | Fees | Monthly Payment | APRC | Annual Cost | Max LTV | Rep. Example |
|---|---|---|---|---|---|---|---|
| Halifax | 3.96% | £1,499 | £957 | 6.9% | £11,479 | 60% | Details |
| Barclays Bank | 4.04% | £1,104 | £964 | 5.7% | £11,498 | 60% | Details |
| Barclays Bank | 4.04% | £1,104 | £964 | 5.7% | £11,623 | 60% | Details |
| Nationwide BS | 4.04% | £1,014 | £964 | 6.1% | £11,322 | 60% | Details |
| HSBC | 4.05% | £999 | £965 | 6.1% | £11,400 | 60% | Details |
Looking for today’s cheapest deals? Read our guide to the Best mortgage rates.
The best mortgage depends on your personal circumstances. The award-winning expert advisers at Mortgage Advice Bureau will find the right mortgage for you.
Get fee-free mortgage advice from the award-winning expert advisers at Mortgage Advice Bureau.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Please note some branches of Mortgage Advice Bureau may charge a fee for mortgage advice if you go direct. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed. So make sure you use this site, this form or phone number for fee-free advice.
| 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% |
The wider global context and economic factors have an impact on mortgage rates in the UK in a number of ways, for example:
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.
KEY INFORMATION
Get fee-free remortgage advice from the award-winning expert advisers at Mortgage Advice Bureau.
Get fee-free remortgage advice from the award-winning expert advisers at Mortgage Advice Bureau.
If you’re coming off a 2 year fixed rate mortgage, average mortgage rates are slightly lower than 2 years ago. The average 2 year fixed rate mortgage in July 2024 was 5.79%, according to data from Moneyfacts. By comparison, the average 2 year fixed rate mortgage in July 2026 is 5.55%.
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 July 2024’s average rate of 5.79% | Mortgage payment at July 2026’s average rate of 5.55% | Monthly saving if you remortgage |
| £1,172 | £1,142 | £30 |
| Mortgage balance | Mortgage payment at July 2024’s average rate of 5.79% | Mortgage payment at July 2026’s average rate of 5.55% |
| £100,000 | £586 | £571 |
| £150,000 | £879 | £856 |
| £200,000 | £1,172 | £1,142 |
| £300,000 | £1,758 | £1,713 |
FCA figures show that nearly 1 million 5 year fixed deals that were taken out in 2021 when rates were ultra-cheap, will end in 2026.
The average 5 year fixed rate mortgage in July 2021 was 2.60%. By comparison, the average 5 year fixed rate mortgage in July 2026 is 5.54%.
Here’s an illustration of how much you’ll pay at these rates if you borrow £200,000 over 30 years.
| Mortgage payment at July 2021’s average rate 2.60% | Mortgage payment at July 2026’s average rate 5.54% | How much more you’ll pay in July 2026 |
| £801 | £1,141 | £340 |
But if you do nothing and roll onto your lender’s standard variable rate (SVR), which averaged 7.13% in July 2026, you could pay much more.
Here’s how much you’ll pay on a £200,000 mortgage over 30 years at 7.13%, compared to if you remortgage at July 2026’s average 5 year fix rate of 5.54%.
| Mortgage payment at July 2026’s average rate 5.54% | Mortgage payments on average SVR of 7.13% | How much more you’ll pay if you move to SVR |
| £1,141 | £1,348 | £207 |
| Mortgage balance | Mortgage payment at July 2021’s average rate 2.60% | Mortgage payment at July 2021’s average rate 5.54% |
| £100,000 | £400 | £562 |
| £150,000 | £601 | £842 |
| £200,000 | £801 | £1,141 |
| £300,000 | £1,202 | £1,685 |
These tables are based on average rates. The mortgage rate you may get access to will depend on your circumstances so speak to an expert mortgage broker and they’ll find the best deal for you.
Get fee-free mortgage advice from the award-winning expert advisers at Mortgage Advice Bureau.
Use this mortgage cost calculator to work out the estimated cost of your mortgage at different rates.
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, get fee-free advice from a mortgage broker who will find 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, depending on your circumstances.”
Get fee-free remortgage advice from the award-winning expert advisers at Mortgage Advice Bureau.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Please note some branches of Mortgage Advice Bureau may charge a fee for mortgage advice if you go direct. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed. So make sure you use this site, this form or phone number for fee-free advice.
Mortgage rates have been falling following recent, rapid hikes linked to the conflict in the Middle East.
However, while there are hopes that rates will continue to fall, experts say the outlook remains uncertain. Also, even with recent cuts, mortgage rates remain higher than before the conflict started.
KEY INFORMATION
The Office for Budget Responsibility’s most recent forecast in November 2025 was that average interest rates on mortgages are expected to rise from around 3.7% in 2024 to around 5% in 2029.
This increase is due to more households coming off cheap fixed rate deals and needing to move onto more expensive rates.
Waiting for mortgage rates to go down before getting a mortgage can be risky for a number of reasons.
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.
By locking in a rate now you can keep it under review in case a better deal comes up before you switch to your new deal. Get fee-free mortgage advice from the award-winning expert advisers at Mortgage Advice Bureau.
Product transfers are predicted 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.
| Switching lenders | Staying with current lender | |
|---|---|---|
| Can you access the best mortgage rates for you? | 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 deciding whether to switch lenders or stay with your current one, make sure you get advice. Speak to a mortgage broker and they’ll find the best deal for your circumstances.
Use this mortgage cost calculator to see instantly how much more or less you’ll pay on your mortgage if interest rates increase or decrease.
The best mortgage depends on your personal circumstances. The award-winning expert advisers at Mortgage Advice Bureau will find the right mortgage for you.
Get fee-free mortgage advice from the award-winning expert advisers at Mortgage Advice Bureau.
Early house price predictions for 2026 suggest an increase in house prices of 1% – 4%. Read more in our guide House price predictions 2026: How much will prices go up by?
Stay up to date with what’s happening with house prices in our monthly House Price Watch.
The mortgage rate you’re offered will depend on your personal circumstances as well as what’s happening in the wider mortgage market. Key factors include:
Yes, it’s always worth speaking to a mortgage broker:
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 July 2026 is 5.54% which is much higher than the average rate on a 5 year fix in July 2021, which was 2.60%.
So if you’re currently on a cheap fix, here’s what to do:
Get fee-free mortgage advice from the award-winning expert advisers at Mortgage Advice Bureau. Compare deals or speak to an adviser today.
Get fee-free mortgage advice from the award-winning expert advisers at Mortgage Advice Bureau.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Please note some branches of Mortgage Advice Bureau may charge a fee for mortgage advice if you go direct. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed. So make sure you use this site, this form or phone number for fee-free advice.
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:
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.
When interest rates go down, lenders usually reduce the amount of interest they’ll pay on savings accounts.
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 reached 2% in June 2025. However, in June 2026, the ECB raised rates to 2.25% as it reacted to rising prices triggered by the Iran war.
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.
At HomeOwners Alliance the best mortgage rates in our tables are from mortgage brokers Mortgage Advice Bureau 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.
Mortgage Advice Bureau search over 100 lenders so you don’t have to.
Get fee-free mortgage advice from the award-winning expert advisers at Mortgage Advice Bureau.
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.
The current UK Bank of England base rate is 3.75% in July 2026.
The average SVR in July 2026 is 7.13%. However, SVRs vary widely by lender. For example Newcastle Building Society’s SVR is currently 6.31% while Aldermore’s SVR is 8.38%.
The Bank of England increased UK interest rates as it tried to get surging inflation down to the government’s target of 2%.
This remains unclear. In July 2026, most experts predict interest rates will either remain the same or increase this year. Read more in our guide Bank of England cut interest rates?
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.
In July 2026, lenders have continued cutting mortgage rates as the beginnings of a mortgage price war emerge. However, while experts think rates could edge lower, the outlook remains uncertain.
Many lenders have been cutting mortgage rates in July 2026, following recent increases. However, while some experts forecast that mortgage rates may continue to fall, they also highlight the volatility of the current outlook.
In July 2026, mortgage rates have been falling, following recent rapid hikes, following the outbreak of the conflict in the Middle East.
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.
| Term | What it is |
|---|---|
| Standard Variable Rate | The default rate you move onto when your mortgage deal ends. Usually higher and more expensive than a fixed mortgage or tracker deal. |
| ERC (Early Repayment Charge) | A fee charged by lenders if you remortgage or pay off your mortgage early, or make overpayments above your allowance during your fixed term. |
| LTV (Loan to Value) | 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. |
HomeOwners Alliance Ltd is registered in England, company number 07861605. Information provided on HomeOwners Alliance is not intended as a recommendation or financial advice.
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