How mortgage remortgage trends UK are changing in 2026

The Bank of England held the base rate at 3.75% on 5 February 2026, a decision that directly influences mortgage remortgage trends UK by providing a period of relative stability for homeowners.

While inflation has hovered around 3.4% in early 2026, the central bank’s stance indicates a cautious approach before potential adjustments later in the spring.

For the 1.8 million households with fixed-rate deals expiring this year, the market is currently more competitive than in 2024, with average two-year fixed rates falling toward 4.85%.

This shift affects individuals across the UK transitioning from older, lower-rate deals to current market conditions.

With the Financial Conduct Authority (FCA) reviewing lending flexibility, a primary trend for 2026 is the increase in “external remortgaging,” as borrowers compare different lenders to benefit from increased market competition.

Market Indicators

• Base Rate: Held at 3.75% in February 2026.
• The 1.8 Million Factor: A record volume of fixed rates expires this year, increasing remortgaging activity.
• Rate Trends: Average 2-year and 5-year fixed deals have dipped below the 5% threshold.
• LTV Competition: Lenders are offering competitive rates specifically for those with 40% equity (60% LTV).
• Government Schemes: The Mortgage Guarantee Scheme remains a permanent fixture in 2026 to assist those with smaller deposits.

The Landscape of Mortgage Remortgage Trends in the UK

In the first quarter of 2026, the UK mortgage market is characterised by increased stability.

Downward movements in swap rates the tools banks use to price mortgages have allowed for the introduction of new products.

UK Finance anticipates gross lending to reach approximately £300 billion this year, driven largely by the volume of necessary refinancing.

++ Budget Hacks for 2026: How Rising Taxes and Slow Growth Will Impact Household Finance

The Rise of External Remortgaging

A notable aspect of mortgage remortgage trends UK is the move away from simple “Product Transfers” with existing lenders. External remortgaging activity is forecast to grow by 10% in 2026.

Homeowners are increasingly switching providers to access lower monthly repayments, rather than automatically staying with their current bank.

Also read: UK Households Cut Spending at Fastest Pace in Years — Financial Strategies for Tight Budgets

The “60% LTV” Threshold

Lenders are currently focusing competitive rates on homeowners with significant equity.

Those who have reached a 60% Loan-to-Value (LTV) ratio either through repayments or property value increases frequently find the most favourable terms.

In this bracket, some two-year fixed rates are approaching 3.5%, a reduction compared to the 2024/25 period.

Strategic Decisions for Fixed-Rate Borrowers

For many, 2026 marks the expiration of deals secured during the period of historically low interest rates in 2021. While the transition involves higher costs, the impact is less severe than in previous months.

“Rate-Booking” as a Strategy

Most lenders allow borrowers to secure a rate up to six months in advance. A growing trend in 2026 involves securing a “safety net” deal early while monitoring the market.

If rates fall further before the current deal expires, many lenders allow a switch to a newer, lower rate within their own range without penalty.

Read more: Later-Life Lending Surge: Why Over-55s Are Borrowing More and What It Means for Retirement Planning

Short-Term vs. Long-Term Fixed Rates

The gap between two-year and five-year fixed rates has narrowed in early 2026. While five-year deals provide longer-term certainty, many borrowers are selecting two-year options.

This choice is often based on the expectation that further base rate adjustments in 2027 might allow for even lower rates in the near future.

Impact on Different Household Types

The effects of current mortgage remortgage trends UK vary significantly depending on geography and equity levels.

Affordability remains a factor in regions with high property values, such as London and the South East.

• Low-Equity Borrowers: While remortgaging can be more complex for those with a 5% or 10% deposit, 2026 has seen an increase in 90% LTV products. There are currently over 900 deals available for those with 10% equity.
• Later-Life Lending: “Retirement Interest-Only” (RIO) mortgages are becoming more common. The FCA is reviewing affordability tests to make these products more accessible for retirees looking to lower monthly outgoings.

Lender Behaviour and New Product Features

Major UK lenders have entered a competitive period to attract remortgage business. With property transactions experiencing a slight dip, banks are relying on refinancing to meet lending targets.

Flexibility and “Green” Options

Lenders are increasingly adapting affordability models to account for varied income types, such as bonuses or self-employed earnings.

Additionally, “Green Mortgages” are now a mainstream trend. Homeowners with an EPC rating of A or B may access rates roughly 0.15% lower than standard ranges, incentivising energy efficiency.

Comparison of Average Mortgage Costs (February 2026)

Mortgage Product Type	Avg Rate (Feb 2025)	Avg Rate (Feb 2026)	Monthly Difference*
2-Year Fixed (75% LTV)	5.48%	4.85%	– £82
5-Year Fixed (75% LTV)	5.25%	4.94%	– £41
Standard Variable Rate (SVR)	8.18%	7.15%	– £135
Tracker (Base + 1%)	5.00%	4.75%	– £32

*Based on a £250,000 mortgage over a 25-year term. Illustrative figures only.

Managing Financial Risks

Despite improving rates, the “lag effect” of previous high interest rates persists. UK Finance projects that mortgage arrears may affect approximately 87,500 households in 2026.

The Standard Variable Rate (SVR) Risk

One of the most significant risks in 2026 is “inertia.” Standard Variable Rates (SVRs) often remain above 7%. Moving from a fixed deal to an SVR can significantly increase monthly costs.

With nearly 2 million deals ending, avoid “accidental” transitions to these higher rates by starting the remortgage process early.

Support Measures

The “Mortgage Charter” remains a key resource for those facing financial difficulty. Homeowners can often request temporary shifts to interest-only payments or term extensions.

It is essential to contact lenders immediately if there are concerns about meeting monthly repayments.

Next Steps for Homeowners

To effectively manage mortgage remortgage trends UK, start your research at least six months before your current deal expires.

Use online calculators to assess the impact on your disposable income and verify your property’s current EPC rating to see if you qualify for “Green” discounts.

Early action is currently the most effective way to secure a competitive rate in the 2026 market.

Frequently Asked Questions

1. Should I remortgage now or wait for another base rate cut?

Securing a rate 3 to 6 months in advance provides a “safety net.” If market rates drop further before your completion date, you can often switch to a better deal offered by that lender.

2. Can I remortgage if my property value has decreased?

If you are in negative equity or a higher LTV bracket, switching lenders may be difficult. However, your current lender will typically offer a “Product Transfer” without a new credit check or valuation.

3. What fees are involved in 2026?

Many remortgage deals include free legal work and valuations. However, arrangement fees (often around £999) may apply.

Compare “fee-free” deals with higher rates against those with fees and lower rates to find the lowest total cost.

4. How do standardized EHCPs affect mortgage applications?

Standardized digital EHCPs introduced this year can help provide clearer evidence of fixed costs and DLA income for families with children with SEND, aiding in more accurate affordability assessments.

5. Is a mortgage broker necessary?

Brokers often have access to “exclusive” deals and can navigate the more complex AI-based criteria now used by many major lenders.