Last year was all about mortgage rates coming down, with four Bank of England cuts, taking the base rate from 4.75% at the beginning of the year, to 3.75% by December. For the most part, mortgage lenders responded by reducing their rates too.
What 2026 will hold for the mortgage market is more difficult to predict: will rates continue with their downward trajectory? Will the affordability criteria be relaxed? How will the mortgage market support first-time buyers? We spoke to five mortgage experts to get their take on what will happen to products, rates and the market in general.
After the multiple rate cuts of 2025, everyone agrees there will be fewer this year, with our experts predicting between one and two. “I expect the Bank of England will go for two rate cuts this year: one in the spring around April and one at the end of the year. Due to the economy weakening and inflation easing,” says John Everest, director at Everest Mortgage Services.
“We expect around two further rate cuts from the Bank of England by the end of the year,” says Richard Dana, founder and CEO of Tembo. “However, the pace of easing is likely to be gradual, as recent data suggests the economy is looking more resilient when it comes to both inflation and growth.”
Nicole Zalys, founder at Villiers & Co, was more restrained and predicted there was more likely to be one cut than two. “Markets are predicting one definite cut and a 30% chance of a second cut happening. While rates should likely ease, we’re unlikely to return to ultra-cheap borrowing anytime soon,” she says.
At the end of 2025, lenders were easing their affordability criteria across the board and, while this will continue in 2026, our experts believe it will be limited to particular borrowers.
“We’re already seeing eligibility criteria soften for certain groups, including self-employed borrowers and foreign nationals,” says Dana. “Rather than a blanket loosening for everyone, it’s more likely we’ll see targeted flexibility, where lenders refine their criteria to better reflect modern working patterns and a more diverse borrower base.”
“In general, I would expect some softening for professionals with stable incomes (teachers, NHS, civil servants), self-employed borrowers with 2–3 years of clean, consistent accounts, and limited company directors with retained profits,” says Zalys.
Everest agrees and flags that he’s heard of a lender that will “offer teachers and educational professionals seven times their income, which is unheard of until now”.
Another trend which has been growing in previous years is underwriting becoming more personal and targeted. Would-be borrowers are less likely to be rejected by a lender for a general reason, for example being self-employed or because their income doesn’t quite make up the necessary multiples needed.
“When it comes to eligibility, we expect lenders to continue cautiously broadening access, but in a targeted way,” says Steve Griffiths, commercial director of retail mortgages at Shawbrook. “Certain groups such as first-time buyers and the self-employed are likely to benefit most, with more nuanced underwriting that better reflects real-world income and affordability.”
Experts agree there will be fewer BoE rate cuts this year, predicting between one and two. ·PaulMaguire via Getty Images
House price stagnation, stricter affordability criteria and the exit of an increasing number of landlords, has seen interest-only mortgages fall out of favour in recent years.
Everest believes that 2026 might see a reversal with more of a selection on offer. “We could see more interest-only options from lenders, which up until now are difficult to obtain. These products are aimed at higher earners, generally of £75,000 to £100,000, to access these broadly and [those with] strong equity.” The relaxation of affordability stress tests is also behind this trend.
In 2025, according to UK Finance, fixed-rate mortgages accounted for 85% of UK mortgages and that dominance looks likely to continue. “Borrower preference for fixed-rate mortgages remains strong. Fixed monthly payments provide stability and make household budgeting easier, which is a key consideration for most families,” says Scott Clay, director at Together.
“That said, as rates continue to fall, variable or tracker products may become more attractive. We could see advisers recommending these options more frequently, particularly for older borrowers with smaller mortgage balances who are less exposed to interest rate fluctuations.”
There were no First-Time Buyer initiatives in the November budget but, despite this, our experts predict 2026 will be a good year for those starting out on the housing ladder. “We expect this to be a bumper year for first-time buyers,” says Dana. “With interest rates easing and affordability improving, there is significant pent-up demand from people who have delayed buying over the past couple of years.”
Rather than wooing FTBs with new products, our experts predict that they’ll be looked on more favourably for existing mortgages.
“We’re more likely to see refinements to existing mortgage products rather than big headline-grabbing innovations,” says Griffiths. “For first-time buyers, that could mean more flexible affordability assessments, higher income multiples and products designed to help renters take the first step onto the ladder.”
The mortgage market is likely to innovate when it comes to smaller, niche products, however. “We’ve already seen a big lender in the buy-to-let space launch tracker mortgages for HMO limited companies which I’ve not seen in the past 10 years,” says Everest.
“I predict we will see innovations with green mortgages (slightly better rates or fees for EPC A–C properties) and more long-term fixes (10-15 years) aimed at stability rather than cheap headline rates,” adds Zalys.
Griffiths also agrees that green mortgages will feature in the 2026 market “but uptake so far suggests lenders may focus more on practical incentives such as cashback for energy improvements rather than entirely new green products”.
Many people don’t have much of a choice when it comes to the timing of getting a mortgage: either it’s at the end of their current deal or, if they’re a first-time buyer, when they’ve found a property to purchase. However, if there is some leeway in when you can swap or enter into a new mortgage deal, when should you aim for over the next 12 months?
“The best time to get a mortgage this year would be between September and October,” says Everest. “By then, we’ll be talking about a second rate cut and this could be factored into the lenders fix rates prior to that happening.”
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