Mortgage rates

Given where we are in December, lenders may keep further rates cuts back until January to grab maximum awareness and attention. Given that 2026 has 1.8 million deals that need refinancing, January is likely to be a hectic month.

It's unlikely we will see a significant change before Christmas, given that the base rate cut expected today has already been priced into the current deals. I woudl be expecting lenders to continue a 2-tier pricing approach into 2026, offering better products to first-time buyers & those moving home, over borrowers looking for a remortgage. Lenders will pull every trick to encourage the property market to start moving, as rates will continue to slide beyond that 3.5% threshold.

The New Year starting pistol is likely to see lenders want to get out of the blocks with gusto. They have made many policy adjustments and rate cuts to tempt borrowers and activity in the last quarter which is quite unusual. I think overall it will be steady and nothing to get over-excited about.

Great news today from the Bank of England! With the base rate dropping to 3.75%, we can expect mortgage rates to continue moving downwards, making it more affordable for people trying to enter the market. This should also provide continued support to the economy, which, at the moment, seems more challenging than ever.

I think we will see this rate war carry on until February with many lenders wanting to start the year with a bang. No doubt the Labour government will claim this as another victory whilst committing small business genocide