Keeping an eye on the Mortgage market matters

Mortgage rates: why keeping an eye on the market matters

Recent events show how difficult it is to predict the direction of mortgage rates. The rates we actually pay depend not just on market forces in the UK, but on events across the world.

While there were signs of improvement in parts of the mortgage market earlier this year, ongoing geopolitical tensions and market uncertainty have continued to affect lender pricing and borrower confidence.

Why mortgage rates have been changing

Mortgage rates have experienced significant fluctuations throughout 2026. Earlier in the year, uncertainty surrounding conflict in the Middle East contributed to rising funding costs which led to many lenders withdrawing or repricing mortgage products.

Although some lenders eventually reduced rates and reintroduced products as market conditions stabilised, further developments in the region have maintained pressure on financial markets. Due to this, expectations for a sustained fall in mortgage rates have become less certain.

Global events can affect your mortgage

Mortgage pricing is influenced by a wide range of factors, including inflation, government borrowing costs, economic growth forecasts and global events.

UK average mortgage rates have risen to the levels seen a month ago.

The average rate on a new two-year fixed deal is 5.59%, according to financial information service Moneyfacts, and the average rate on a five-year fixed deal is 5.61%

This shows how events thousands of miles away can affect how much you pay for your home, and why it’s impossible to predict what will happen to the cost of mortgages over the coming months, let alone years.

What happens to mortgages now?

Many borrowers will of course be hoping for lower mortgage rates in the future. However, inflation remains a key consideration.

The role of inflation

If blockades and tension mean global oil and gas prices continue to head upwards, the cost is likely to feed through into virtually all goods and services in the UK. If inflation remains high, the Bank of England may find it necessary to reverse the planned reductions and raise the base rate in an attempt to bring prices under control.

Why fixed-rate mortgages remain popular

Against this backdrop, many borrowers continue to favour fixed-rate mortgages, particularly two and five-year deals.

A fixed-rate mortgage provides certainty over monthly repayments for an agreed period, helping homeowners budget more effectively regardless of future market movements.

While nobody knows exactly where rates will go next, locking into a suitable deal can provide protection against potential increases during the fixed-rate term.

Is it time to remortgage?

Around 1.8 million fixed-rate mortgages are expected to come to an end during 2026, meaning a large number of borrowers will soon need to consider their next steps.

UK homeowners traditionally opt for two or five-year fixed mortgage deals, meaning they are exposed to rate rises when global events which disrupt the global economy for the short to medium term.

If your current deal is due to expire in the coming months, reviewing your options early could be worthwhile. Many lenders allow borrowers to secure a mortgage offer several months in advance, which may provide greater flexibility while you monitor market developments.

Looking beyond headline rates

What’s more, lenders constantly adjust their products, so the mortgage rates league tables change all the time. And the lowest rates may have terms attached to them, and charges which bump the cost right back up.

You might find that the most competitive deal for you could actually come from a small and obscure lender.

You need to shop around, but with round 340 regulated mortgage lenders and in the region of 7,500 mortgage deals available that can be time consuming and will demand some expertise.

Why professional mortgage advice matters

While nobody can predict exactly where mortgage rates 2026 will go next, reviewing your options sooner rather than later could give you greater flexibility.

Whether you are buying your next home or considering a remortgage, understanding mortgage rates 2026 and the wider market may help you make a more informed decision.

At Continuum, we can discuss your needs, and find a suitable mortgage deal to meet them, searching the entire mortgage market, including deals that are not generally advertised. Call us today.

Sources:

Mortgage Rates Forecast – Hoa.org.uk

UK mortgage rates rise to highest level for a month – BBC News

Mortgage lending statistics – FCA

This article is intended for general guidance only and is based on the opinion of Continuum it does not constitute financial advice. Individual circumstances vary, and you should consider seeking advice from a regulated financial adviser before making any decisions about your mortgage planning.

You may have to pay an early repayment charge to your existing lender if you remortgage.

Your home may be repossessed if you do not keep up repayments on your mortgage.