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Why rising mortgage rates are good news for FTBs

ended 17. March 2026

Thisismoney Exclusive.

Mortgage rates are rising and borrowers, especially first-time buyers (FTBs), are getting VERY nervous. But brokers have said that, paradoxically, first-time buyers should EMBRACE the increases and understand that this "tough" market they suddenly find themselves in might actually be the best OPPORTUNITY they have had in years. Essentially, they shouldn't let the rate talk scare them off but use it to their advantage.

Why is now an opportunity? Because FTBs' negotiating position has just been significantly strengthened due to the war in the Middle East, which has sent mortgage rates north, which has once again made it very much a buyers' market as demand drops off.

In a strong buyers' market, where sentiment is weak and sellers on shaky ground, FTBs can save way more on a reduced property price and slightly higher mortgage rate than they would by paying a higher price and getting a lower mortgage rate (and can potentially remortgage off the higher rate in two years, say). Views from brokers and property experts below.

More info and a working example from Darryl Dhoffer, who suggested the story….

We’ve all seen the headlines this week—mortgage rates are creeping back up. But if you're looking to get on the property ladder, this "tough" market might actually be the best opportunity you've had in years.

While other buyers are hesitating, the Power of Negotiation is back. Here is why simple negotiation actually works in your favour if you haggle a lower purchase price today.

The "Negotiation"

Because demand has dipped, sellers are becoming much more realistic. Did you know that negotiating just a 1.1% reduction cancels out the recent rate rise today? But if you aim for 5%, look at the massive long-term win:

THE "WAIT & SEE" (2 Weeks ago):

*Purchase Price: £300,000 (Full Price)

*10% Deposit: £30,000

*Interest Rate: 3.9%

*Monthly Payment: £1,411

Balance after 5 years: £234,420

THE "SMART MOVE" (Today):

*Purchase Price: £285,000 (5% Off)

*10% Deposit: £28,500

*Interest Rate: 4.3%

*Monthly Payment: £1,396

Balance after 5 years: £224,980

Above examples are based on a 5yr fixed rate with an overall term of 25 years, and correct as of 12th March 2026

The Result?

By negotiating the price down, you aren't just keeping your monthly payments lower. The real win is your mortgage balance. After your 5-year fixed term ends, you would owe £9,440 LESS on your home than if you had bought at the "lower rate" but higher price two weeks ago. That is nearly £10k of extra equity in your pocket just for being a savvy negotiator!

Why now?

Less Competition: Fewer bidding wars mean you have the upper hand.

Motivated Sellers: Sellers are more likely to accept a lower offer to secure a move.

Equity Boost: You’re starting your journey with a lower debt-to-value ratio.

6 responses from the Newspage community

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Darryl DhofferVerified
Founder at The Mortgage Geezer
What many people forget amid the rising mortgage rate hysteria is that higher borrowing costs are actually a powerful buyer’s lever. When rates climb, the pool of qualified buyers shrinks, causing properties to sit on the market longer. This shift in momentum moves the upper hand from the seller, to you. Instead of fixating on the interest rate, focus on the purchase price. You can remortgage a high rate later, if or when mortgage rates lower, but you can never change the price you paid. Sellers, of homes sitting on the market for 30+ days, are often anxious and more open to aggressive under-asking offers. Fortune favours the bold. By negotiating a lower price today, you secure equity growth which could work out cheaper on your mortgage repayments in a rising interest rate market.
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Patricia OgunfeiboVerified
Founder & non-practicing Solicitor at tenant2owner
When rates rise, buyers tend to panic and step back; more so if they’re buying for the first time. But those who understand how the numbers work can turn that panic into their advantage because there is less competition and more negotiating power. In times like this, motivated sellers drop their prices. Think selling landlords, for example. A 5% discount on a £200,000 home saves £10,000 off the mortgage balance, permanently. Meanwhile, someone who bought at a "better" rate but a higher price would likely owe more after five years. Rates can be always be refinanced, but the price paid is locked in forever. This is why education matters. The headlines shout "rates up, dream over". The reality? Informed first-time buyers are negotiating hard and building equity from day one, especially in areas where landlords are selling fast. Knowledge can therefore be the best deposit top-up, and higher rates now can be very good news for the savvy first-time buyer.
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Louis MasonVerified
Content and Communications Director at Oportfolio Mortgages
The “rates are rising, it’s game over” narrative misses what’s really changed. Power has shifted back to buyers. In a low-rate market, first-time buyers were often overpaying just to compete. Today, pricing is softer, sellers are negotiable and there’s far less pressure to rush, so the overall deal can actually be better, even with higher borrowing costs.
It’s not universally easier, unfortunately. Affordability is still tight, but for well-prepared buyers, this is one of the first markets in years where you can act strategically rather than reactively. For many, that makes it less a crisis and more a window of opportunity.
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Nouran MoustafaVerified
Practice Principal & IFA at Roxton Wealth
Yes, rates rising is painful, but I do think a lot of people are missing the other side of the story. A higher rate environment does not automatically mean game over for first-time buyers. In some cases, it can actually create better opportunities, because when borrowing gets harder, the frenzy cools, sellers become more realistic, and buyers finally get room to negotiate properly. That matters. A first-time buyer is not just buying a rate, they are buying a property, a price point and a long-term position. If you can secure a discount on the purchase price, avoid a bidding war and buy in a calmer market, that can outweigh paying a bit more on the mortgage in the short term. With this in mind, aspiring buyers should be active, not defeated. This is not a market for panic, but it can absolutely be a market for smart, informed first-time buyers who are ready to move when others are frozen.
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Sarah Fox-ClinchVerified
Director at Fox Davidson
It's a matter of economics. When mortgage rates rise, affordability becomes stretched and buyer demand falters. This can result in property prices remaining flat and even falling. Add in buy to let investors coming off lower fixed rates onto much higher rates, and holiday let investors trying to manage the upcoming tax changes and regulation around the holiday let market, and we may see property prices fall as buy to let and holiday let properties are put up for sale. These properties tend to be smaller lower value homes which make ideal first time buyer purchases.

Rising rates and the upcoming withdrawal of holiday let tax breaks and increasing Governmental regulation could constitute a 'perfect storm' to the benefit of the savvy first time buyer.
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JEAN PIERRE KALEBICVerified
Senior Mortgage Advisor at OnlineMortgageAdvisor.co.uk
First time buyers with a healthy deposit can still get a 5 year fixed rate mortgage around 4.5% which is a far cry from the eye-watering rates seen following the Kwame-geddon budget a couple of years ago! With landlords leaving the market en masse due to the dwindling tax benefits of owning investment properties and lenders' recent loosening of loan to income multiples, first time buyers are now able to buy homes they could have only dreamed of just 6 months ago. So, far from being all doom and gloom, I believe there has never been a better time to be a first time buyer!