After an extended period of elevated borrowing costs and constrained lending, 2025 closed with some great improvements. In fact, all of the signs suggest that 2026 could see real momentum returning across the board.
One of the most striking features of the UK mortgage landscape as we step into 2026 is the sheer range of product choice now available. According to the latest Moneyfact’s data, there are over 7,100 live residential mortgage products on the market. This expanding catalogue of deals means borrowers, particularly first-time buyers and those with smaller deposits, now have far more flexibility in choosing a product that suits them.
The slight reduction in average mortgage rates has also been welcome news. Early 2026 figures show two-year fixed rates below 5% and broader rate indices trending lower year-on-year. Tracker products have seen even steeper falls, potentially opening the door to more affordable borrowing for those comfortable with some rate variability.
Market confidence is starting to build. Many commentators are describing the mood among lenders and borrowers as optimistic with caution. Potentially, this comes with a reflection of lower costs, deeper product availability and expectations for further base rate adjustments throughout the year. Stress-testing regimes are also expected to become less rigid, easing one of the key hurdles that has made affordability tougher in previous years.
Looking at industry forecasts beyond product pricing, some major bodies, such as the Intermediary Mortgage Lenders Association (IMLA) and UK Finance anticipate gross mortgage lending to rise in 2026. This includes both house purchase and remortgage activity, with external remortgaging volumes predicted to grow as fixed-rate deals come to an end and borrowers reassess their options.
So how might 2026 actually play out for those in the market?
First-Time Buyers
With potentially higher availability of low-deposit deals and more competitive pricing than we’ve seen in recent years, first-time buyers could find 2026 significantly more accessible.
Remortgagers
According to UK Finance, round 1.8 million fixed-rate mortgages are due to mature in 2026, creating a surge of activity in the remortgage market. For many, this could be an opportunity to lock in better terms. The incentive to switch is significant, given the gap between fixed rates and standard variable rates.
Movers and Buy-to-Let Investors
Home movers could benefit from more choice and improved affordability, if they ensure their timing and pricing strategy ties in with forecasts of suggested house price growth. Across the buy-to-let sector, we expect to see continued improvements, supported by significant rental yields.
Conclusion: A Mortgage Market on Firmer Footing
Borrowers and lenders alike are entering 2026 with higher expectations than we’ve seen in recent years. A wide range of products, potentially lower rates and increasing confidence from market analysts are all contributing to a sense that the mortgage market has turned a corner.
If you’re seeking mortgage advice, we’ll be happy to refer you to our trusted partners for independent financial guidance. Feel free to contact your nearest branch.
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