A big year for mortgage decisions
Around 1.8 million fixed-rate mortgages are due to expire in 2026. If yours is one of them and you do nothing, your lender will move you onto its standard variable rate, which currently sits at around 6.49%. For most borrowers, that means a noticeable jump in monthly payments. The good news is that you have options, and the market is more competitive right now than it was earlier in the year.
What the rate environment actually looks like
Two-year fixed rates spiked to around 5% in spring before falling back, then edged up again in mid-July as geopolitical uncertainty unsettled markets. That kind of movement is uncomfortable, but it reflects how sensitive swap rates (the wholesale borrowing costs lenders use to price fixed deals) are to global events.
The Bank of England has held the base rate at 3.75%, but lenders have not been sitting still. Major banks pushed through multiple rounds of rate cuts through June and into July, competing hard for remortgage and purchase business. That competition has brought some genuinely useful deals back onto the market.
Experts broadly expect the Bank of England to cut the base rate further in 2026, provided inflation stays in the 2.8 to 3% range. Nothing is guaranteed, but that expectation is shaping how lenders are pricing their products right now.
Your three main options
1. Two-year fixed rate
A two-year fix gives you certainty for the short term and, right now, competitive headline rates. The trade-off is that you will be remortgaging again in 2028. If rates have risen by then, you are exposed. This option suits buyers who expect their circumstances to change (growing family, potential house move, income changes) and want flexibility sooner rather than later. Just make sure the arrangement fee does not eat into any rate saving.
2. Five-year fixed rate
A five-year fix costs a little more per month in many cases, but it buys you payment certainty for longer. For households managing a budget tightly, knowing exactly what your mortgage costs for the next five years has real practical value. If base rates fall sharply, you will not benefit immediately, but you also will not be caught out if they rise again. This is the option most brokers are discussing with clients who want to plan ahead with confidence.
3. Tracker mortgage
A tracker follows the Bank of England base rate, usually at a set margin above it. If the base rate falls in 2026 as many expect, your monthly payment falls too, automatically. The risk runs the other way as well: if rates rise, so does your payment. Trackers typically have no early repayment charges, which makes them attractive if you want to switch deals quickly. They work best for borrowers who can absorb some payment variation and want to benefit from any cuts without delay.
Practical steps to take now
Start looking at deals up to six months before your current fix ends. Most mortgage offers are valid for six months, so you can lock in a rate today and complete your remortgage when your deal expires. You are not committed until you complete, and some lenders will let you switch to a better deal if rates fall before then.
When you compare deals, look at the total cost over the fixed period, not just the headline rate. A deal at 4.3% with a £1,500 arrangement fee can cost more overall than a deal at 4.5% with no fee, depending on your loan size. Run the numbers, or ask a broker to do it for you.
An independent mortgage broker has access to deals from across the market, including some not available directly from lenders. They can also advise on your specific situation: income type, loan-to-value ratio, credit history. Speak to your solicitor if you have questions about the legal side of remortgaging, particularly if you are making changes to ownership or title at the same time.
Where things stand
The rate environment is not the easiest it has ever been, but it is meaningfully better than it was twelve months ago. Lender competition is real, deals have improved, and borrowers who take the time to compare options are finding better outcomes than those who roll onto the standard variable rate by default. If your fix is expiring in 2026, now is a sensible time to start the conversation.
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