Competition among lenders suggests that mortgage rates could be cut in the coming weeks, according to brokers and analysts.
In a newly-published report, financial information service Moneyfacts said “expectations are high for a booming market in 2026”.
Its data shows the choice of mortgage products has risen to its highest level in 18 years, with first-time buyers now also being helped by looser requirements from lenders.
Mortgage rates fell over the last year, but wider global and economic uncertainty still has the potential to derail any further improvements. Some borrowers also still face a financial hit when their current deal comes to an end.
More than eight in 10 mortgage customers have fixed-rate deals.
The interest rate on this kind of mortgage does not change until the deal expires, usually after two or five years, and a new one is chosen to replace it.
In August last year, the average two-year fixed mortgage rate dipped below 5% for the first time since former Prime Minister Liz Truss’s mini-budget in September 2022.
Rates have fallen further, with some movement in recent days, and Moneyfacts has predicted more declines early this year.
“Expectations are high for a booming market in 2026. Mortgage rates are lower year-on-year, and the choice of deals is abundant,” said Rachel Springall, finance expert at Moneyfacts.
“First-time buyers are not being left behind by this progress.”