MORTGAGE RATES 2026

Are Mortgage Rates Finally Falling – And What Does It Mean for You?

After a turbulent period for the mortgage market, there are now clear signs that stability is returning — and with it, renewed confidence.

While recent headlines may suggest uncertainty, the bigger picture tells a more reassuring story.

We’re Past the Peak of the Rate Shock

The Bank of England base rate is currently sitting around 3.75%, down from its 2024 peak of 5.25%.

This marks an important turning point. The aggressive cycle of rate rises is behind us, and policy has shifted towards a more stable “hold or gently ease” phase.

👉 Mortgage markets tend to settle before base rates fall — and we’re starting to see exactly that.

There’s a Clear Path Towards Lower Rates

Although there may be short-term fluctuations, longer-term forecasts remain positive.

We’re expecting:

• Base rate to drift towards approximately 3.25%
• Mortgage rates to settle around 4% or slightly below

This is supported by improving fundamentals:

• Inflation trending back towards the 2% target
• Wage growth beginning to outpace house price growth

👉 In simple terms: today’s volatility is short-term noise, not a long-term direction of travel.

The Property Market Is Holding Firm

Despite higher borrowing costs, the housing market has shown impressive resilience.

• House prices are forecast to grow by around 1–4% in 2026
• Buyer demand remains steady
• Transaction levels are only slightly down — not falling sharply

👉 This stability suggests confidence is still there — just waiting for the right conditions to accelerate.

Stability Is Returning — And That Matters Most

Experts are increasingly describing 2026 as a “stabilisation year”.

We’re seeing:

• More predictable mortgage pricing
• Fewer sudden market shocks
• Buyers beginning to re-engage with confidence

👉 In reality, certainty often matters more than ultra-low rates. A stable market unlocks movement.

Lending Is Growing Again

Mortgage lending is forecast to reach around £300bn in 2026.

That tells us:

• Banks are actively lending
• The system is functioning normally
• We are not in a credit crunch environment

So Why Does It Still Feel Uncertain?

Recent global events and economic headlines have caused short-term rate spikes and lender repricing.

But this is market volatility — not a structural issue.

The Key Takeaway

The mortgage market today is:

• More stable than it feels
• Past the most challenging period
• Gradually improving beneath the surface

It may not be “cheap money” anymore — but it is becoming:
👉 more predictable
👉 more sustainable
👉 and slowly more affordable

For buyers, sellers and homeowners alike, that shift creates opportunity.