Last year was all about falling mortgage rates, with four cuts by the Bank of England taking the base rate from 4.75% at the start of the year to 3.75% by December. For the most part, mortgage lenders responded by lowering their rates.
What 2026 will hold for the mortgage market is harder to predict: will rates continue their downward trajectory? Will the accessibility criteria be relaxed? How will the mortgage market support first-time buyers? We spoke to five mortgage experts to understand what will happen with products, rates and the market in general.
After multiple rate cuts in 2025, everyone agrees there will be fewer this year, with our experts predicting between one and two. “I expect that the Bank of England will opt for two interest rate cuts this year: one in the spring around April and one at the end of the year. Due to the weakening of the economy and the easing of inflation,” says John Everest, director of Everest Mortgage Services.
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“We expect around two more 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 appears more resilient in terms of both inflation and growth.”
Nicole Zalys, founder at Villiers & Co, was more reserved and predicted there was more likely to be one cut than two. “Markets are predicting a definitive cut and a 30% chance of a second cut happening. While rates should probably come down, it’s unlikely we’ll be back to ultra-cheap loans any time soon,” she says.
At the end of 2025, lenders were reducing their affordability criteria across the board, and while this will continue into 2026, our experts believe it will be limited to certain borrowers.
“We’re already seeing the eligibility criteria bend for certain groups, including the self-employed and foreign nationals,” says Dana. “Rather than a general loosening for everyone, we are more likely to 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 easing for professionals on stable incomes (teachers, NHS, civil servants), self-employed borrowers with 2-3 years of clean, consistent accounts and directors of limited companies with retained profits,” says Zalys.
Everest agrees and reports that he has heard of a lender that will “give teachers and education professionals seven times their income, which is unheard of before.”
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Another trend that has grown in previous years is subscriptions becoming more personal and targeted. You can borrowers are less likely to be rejected by a lender for a general reason, for example if they are self-employed or because their income does not meet the required multiples.
“When it comes to eligibility, we expect lenders to continue to cautiously expand access, but in a targeted way,” says Steve Griffiths, commercial director of 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
Stagnant house prices, tighter affordability criteria and a growing number of homeowners leaving have fallen out of favor with interest-only mortgages in recent years.
Everest believes 2026 could see a reversal with more selection on offer. “We could see more interest-only options from lenders, which have so far been hard to come by. These products are aimed at higher earners, generally between £75,000 and £100,000, to access widely and [those with] strong equity.” The relaxation of accessibility stress tests is also behind this trend.
In 2025, according to UK Finance, fixed rate mortgages accounted for 85% of UK mortgages, and this dominance looks set to continue. “Borrower preference for fixed rate mortgages remains strong. Fixed monthly payments provide stability and ease household budgeting, which is key for most families,” says Scott Clay, director at Together.
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“That said, as rates continue to fall, variable or tracker products may become more attractive. We could see advisers recommending these options more often, particularly for older borrowers with lower mortgage balances who are less exposed to interest rate fluctuations.”
There were no first-time buyer initiatives in November’s Budget, but despite this, our experts predict 2026 will be a good year for first-timers. “We expect it to be a great year for first-time buyers,” says Dana. “With interest rates falling and affordability improving, there is significant pent-up demand from people who have put off buying for the past two years.”
Rather than attracting FTBs with new products, our experts predict they will be viewed more favorably on existing mortgages.
“We are more likely to see improvements to existing mortgage products rather than major innovations,” says Griffiths. “For first-time buyers, that could mean more flexible affordability assessments, higher income multiples and products designed to help renters get their first step on the ladder.”
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However, the mortgage market is likely to innovate when it comes to smaller, niche products. “We’ve already seen a large mortgage lender tracking the launch of buy-to-let space for HMO limited companies, which we haven’t seen in 10 years,” says Everest.
“I predict we will see innovation with green mortgages (slightly better rates or fees for EPC A–C properties) and more long-term (10-15 year) corrections aimed at stability rather than cheap across-the-board rates,” adds Zalys.
Griffiths also agrees that green mortgages will hit the market from 2026 “but uptake so far suggests that 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 choice when it comes to when to get a mortgage: it’s either at the end of their current deal or, if they’re a first-time buyer, when they’ve found a property to buy. However, if there is some leeway in when you can switch or get into a new mortgage deal, when should you be looking in 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 that could be factored into lenders’ rate-fixing before that happens.”
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