Mortgage Market Forecast for 2026: Rates, Remortgaging and What Homeowners Need to Plan
Why 2026 is a planning year for borrowers
For many households, 2026 is less about chasing the perfect rate and more about making smart, timely decisions. Large numbers of fixed rate deals are still rolling off, lenders continue to compete for high quality applications, and the direction of travel in borrowing costs has become more supportive than it was at the peak of the rate cycle.
One reason is the base rate backdrop. The Bank of England cut Bank Rate to 3.75% on 18 December 2025, which lowers the baseline for variable rate borrowers and influences broader market pricing expectations.
https://www.bankofengland.co.uk/boeapps/database/Bank-Rate.asp
What the industry expects for mortgage lending in 2026
UK Finance’s latest mortgage market forecast points to steady growth in refinancing in 2026, with external remortgaging expected to rise 10% to £77 billion and product transfers expected to rise to £261 billion.
https://www.ukfinance.org.uk/news-and-insight/press-release/modest-growth-forecast-mortgage-lending-in-2026
This aligns with the wider sense that 2026 will remain a high activity year for borrowers reviewing deals, especially where households fixed at higher rates and are now looking for improved options.
Looking beyond refinancing, IMLA also expects overall mortgage lending to rise. Its published outlook expects gross mortgage lending to reach £320 billion in 2026, with remortgaging still a substantial part of total activity.
https://www.imla.org.uk/publications/
What is happening with mortgage rates
While individual products vary widely by loan to value and borrower profile, the average direction has been downward. Moneyfacts reports that average two year and five year fixed rates fell to 4.86% and 4.91%, the lowest levels since before the September 2022 mini-budget, reflecting easing funding conditions and competitive lender behaviour.
https://moneyfactscompare.co.uk/news/mortgages/average-rates-at-lowest-level-since-september-2022/
This does not mean every borrower will see dramatic improvements, but it does mean many homeowners and buyers have more scope to compare and plan than they did when average rates were materially higher.
What homeowners should do if a fixed deal is ending
The practical priority in 2026 is timing. If your fixed rate is due to end, the earlier you review options, the more flexibility you tend to have. That includes time to compare products, account for fees, and consider whether a new fixed rate or a more flexible option suits your circumstances.
Even in a more favourable pricing environment, leaving decisions too late can create pressure and reduce choice, particularly if your financial profile has changed since you last applied.
What this means for buyers considering a purchase
If you are buying in 2026, affordability is still assessed carefully, but easing average rates can help monthly repayment profiles look more manageable. In practice, that may widen the range of options available, especially for borrowers who are close to affordability limits.
The key is to treat mortgage planning as part of the purchase strategy, not an afterthought. The best outcomes usually come from early clarity on borrowing range and lender criteria.
How Altura can help you stay ahead in 2026
At Altura Mortgage Finance, we help homeowners and buyers navigate changing lender criteria, product pricing, and remortgaging timelines. If you have a fixed deal ending in 2026, or you are considering a purchase this year, we can help you build a plan around the options that actually fit your circumstances.
If you would like support reviewing your next steps, get in touch with Altura Mortgage Finance, or browse our Insights for ongoing market updates.
Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it. Think carefully before securing other debts against your home. The guidance and/or advice contained within the website is subject to the UK regulatory regime and is therefore primarily targeted at customers in the UK. Altura Mortgage Finance Limited is authorised and regulated by the Financial Conduct Authority. Firm Registration No: 827849 www.fsa.gov.uk/register/home.
