Moneyfacts mortgage and savings forecasts 2026

Moneyfacts has just published the following forecasts. Any thoughts, send them across ASAP.

What rates can borrowers and savers expect in 2026?

A Base Rate around 3.5% in 2026 may signal a return to a more “neutral” rate environment but benefits for households may be uneven.  While easing pressure on borrowers, meaningful returns for savers may become more elusive.

Mortgages

• The Bank of England governor’s comments suggesting that any further cuts next year are more in the balance could lead to more caution from lenders.
• Mortgage rates have typically tracked around 0.8 percentage points above the Base Rate, suggesting average mortgage rates of 4-4.5% in a 3-3.5% Base Rate environment.
• If the Moneyfacts Average Mortgage Rate reaches 4.3% in 2026 a typical borrower taking out a fixed rate mortgage will be around £38 per month (£456 per year) better off for every £100k borrowed over 25 years, compared to today.

Savings

• Savings rates have lagged the Base Rate by about one percentage point since 2023, implying average savings rates of roughly 2.5% if the Base Rate settles at 3.5%.
• Even if inflation reaches the Bank of England’s 2% target, many savers will struggle to achieve meaningful real returns on cash.