Mortgage Rate Predictions 2026: Should You Fix Now or Wait for Rates to Fall Further?

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Mortgage rates are expected to fall further in early 2026 as inflation continues to ease and the Bank of England is widely expected to make further base rate cuts. While nothing is guaranteed, the outlook for borrowers is more positive than it has been for some time.

Below, the team at Quealy & Co Financial Services Ltd. break down the latest mortgage rate predictions for 2026, what’s driving lender behaviour, and what this could mean for homeowners and buyers across North Kent and beyond.

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Mortgage Rate Predictions – January 2026 Update

The Bank of England cut interest rates from 4% to 3.75% on 18 December 2025, a move that had already been largely priced in by some lenders. Others reduced their mortgage rates throughout December with some a little slower to react, reducing their rates in January.

Again, whilst nothing is guaranteed, the general feeling is that Bank of England Base Rate may continue to reduce this year, however this may not automatically result in a further reduction in mortgage rates.

Key developments so far in January 2026:

• Lenders including HSBC, Leeds Building Society and Kensington Mortgages cut mortgage rates.

• As of 13.1.26 a number of lenders are offering rates just under 3.6%, the lowest widely available 2-year fix since September 2022.

• Inflation data published on 17 December showed inflation falling to 3.2% in November 2025, a sharper drop than forecast and a key driver behind December’s rate cut.

• Despite improving conditions, mortgage rate predictions can change quickly – trying to time the market perfectly is risky.

Our view at Quealy & Co Financial Services Ltd.

If you’re due to remortgage in the next few months, it can make sense to speak to a mortgage broker now, secure a rate, and keep it under review. Many deals allow you to switch if something better appears before completion.

This uncertainty is reflected in wider public sentiment. In a recent Homeowner’s Alliance survey:

• 37% expect mortgage rates to rise in the next 12 months

• 25% think rates will stay the same

• 16% believe rates will fall

• 22% simply don’t know

That uncertainty highlights why personalised advice matters more than ever.

Will Mortgage Rates Go Down in 2026?

Most experts expect mortgage rates to trend gradually lower through 2026, supported by further base rate cuts. However, dramatic drops are unlikely.

Why? Because much of the expected interest rate reduction has already been priced into fixed-rate mortgages. That’s why some of the cheapest 2-year fixed deals are currently below the base rate of 3.75%.

If interest rates fall faster or further than expected, mortgage rates could dip again. But if inflation proves stubborn or the economy changes course, rates could edge back up.

Is 2026 a Good Time to Remortgage?

For many borrowers, yes – 2026 is shaping up to be a good year to remortgage. But the right answer always depends on your personal circumstances.

Here’s what to consider:  

1. Check when your current deal ends

If your mortgage deal expires within the next six months, you should start reviewing options now. This helps you avoid rolling onto your lender’s standard variable rate (SVR), which can be close to 10% and cost thousands more each year.

2. Get expert, tailored advice

At Quealy & Co Financial Services Ltd., we compare the whole of market to find a mortgage that fits your situation – not just the headline rate.

3. Fixed vs variable mortgages

In January 2026, many fixed-rate deals are cheaper than variable options. Fixed rates provide certainty, while trackers can benefit if rates fall further – but they can also rise. Choosing the right option depends on your risk tolerance and plans.

4. If you’re on an SVR

If you’re already on your lender’s SVR, it’s worth reviewing your options urgently. Remortgaging could significantly reduce your monthly payments.

How to Secure the Best Mortgage Rate in 2026

Act early:

You can usually secure a new rate up to six months before your current deal ends.  

Lock in a deal:

In a volatile market, securing a rate now can protect you if pricing worsens.  

Keep reviewing:

Many lenders allow you to switch to a better rate before completion if the market improves.  

Avoid overpaying:

Starting early helps prevent slipping onto an expensive SVR by mistake.

Ready to Talk Through Your Options?

For expert guidance tailored to your circumstances, get in touch with Quealy & Co Financial Services Ltd. today. We’re here to help you:

1. Understand how interest rate changes affect you

2. Find the most suitable mortgage or remortgage deal

3. Plan confidently for the year ahead

Call us on 01795 505761

Email mortgages@quealy.co.uk

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

Quealy & Co Financial Services Ltd. is authorised and regulated by the Financial Conduct Authority No. 919693. Most Buy to Let mortgages are not regulated by the Financial Conduct Authority and will not benefit from the same regulatory protection as residential mortgages.