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Mortgage rates have been volatile recently, despite several base rate cuts since the summer of 2024, so anyone looking for a mortgage might be wondering how to get the best deal.
Inflation rose unexpectedly in the 12 months to December 2025, and remains well above the government’s 2% target. The base rate was left unchanged in February, although markets currently expect a couple of rate cuts this year, although there are no guarantees.
Reviewing your mortgage is always worthwhile, but especially if you’re currently on your lender’s standard variable rate (SVR). Average rates on two and five-year fixed mortgages stood at 4.85% and 4.94% respectively at the beginning of February 2026, according to data from the latest Moneyfacts UK Mortgage Trends Treasury Report. Moneyfacts estimates that homeowners could save around £350 per month by securing a two-year fixed deal at the average rate of 4.85% instead of paying the average SVR of 7.15%. These calculations are based on a £250,000 mortgage over a 25-year term on a repayment basis.
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Want to speak to a mortgage adviser? Speaking to an experienced adviser can help you to understand your options and get a great deal on your mortgage.
If you’re looking for expert mortgage advice, you can get a free consultation with an independent mortgage adviser at Fidelius. Speak with a qualified, FCA-regulated, independent mortgage adviser you can trust. Rated 4.7/5 on VouchedFor from over 2,600 reviews.
How to spot a good mortgage deal
Mortgage lenders always keep a close eye on their rivals’ rates; if one lender raises its rates, others typically do the same to make sure they aren’t overwhelmed with applications. But that changed at the start of the year, with mortgage lenders cutting rates to become more competitive and to attract customers.
Although average two and five-year fixed rates are just below the 5% mark, there are better deals to be found, with best buys available from 3.55%. Bear in mind that rates rarely fall across a lender’s full range of mortgages. If a bank wants to increase the number of five-year fixed rate mortgages it sells, it will often tweak that rate while leaving the rest alone.
Deals can be withdrawn quickly too, so don’t hang around if you see a deal you like. Lenders always keep one eye on the amount of business they generate by reducing rates and may pull deals fast if they receive a large number of applications.
Oliver Dack, spokesman for the Mortgage Advice Bureau, said: “While there are expectations for the cost of borrowing to come down in 2026, there are never any guarantees, and it could prove more cost-effective to lock into a fixed deal sooner rather than later.”
Remember that you should always look at the overall cost of any deal when considering how competitive it is, rather than focusing on the headline rate alone. Find out more about this in our guide Why the lowest rate mortgage may not be the cheapest deal.
It’s still the case that the more equity or the larger the deposit you have, the better the rate you’ll get, but these days you may qualify for the best rates with a 30% or 35% deposit/equity, rather than the 40% needed some months ago.
Should I go for a tracker or fixed rate mortgage?
You’ll currently pay more if you opt for a tracker rate mortgage, which tracks the Bank of England base rate plus a set percentage, compared to a fixed rate mortgage, because interest rates are expected to fall in coming months.
For example, at the time of writing, Santander has a two-year fixed rate mortgage deal at 3.55%, which is available on mortgages up to 60% loan to value. However, in comparison, Halifax’s best buy two-year tracker deal, which is 0.11% over base rate, and means you’d currently be paying 4.11%, is more expensive. This deal is again available on mortgages up to 60% loan to value.
Because the rate difference is significant, most borrowers may find they are better off with a fixed rate for now – although the reverse could end up being true if the base rate reduces. That means you need to weigh up how important it is for you to have budgeting certainty. Learn more in our article Should I go for a fixed or variable rate mortgage?
Teddy Cenaj, mortgages expert at Habito said: “The majority of people choose a fixed rate mortgage for the security they offer, as it’s important to have control over the biggest outgoing in most people’s lives. The small percentage of people who choose a variable rate mortgage do so for a variety of reasons, such as they don’t want early repayment charges or are looking to sell soon.”
Tips to secure a great mortgage deal
Before the credit crunch (which seems like a lifetime ago), getting a mortgage was child’s play, but even though lenders are now much less terrified of the prospect of lending money, they’re still examining applications carefully.
Try the following to secure a great deal:
Start looking early: If you’re remortgaging, you should start looking for another mortgage deal at least three months before yours comes to an end.
Get the biggest deposit you can: If you’re close to a threshold (for example, you have a deposit of 23% or 24%, but not 25%), consider saving for a bit longer to make up the difference.
Take advice on the best way to secure the most competitive rate: These days getting a mortgage is as much about matching what a mortgage lender is looking for in a borrower with your circumstances as it is about spotting the cheapest deal on best buy tables. It’s therefore usually a good idea to seek professional mortgage advice from a broker who will be able to help you find the right deal to suit your needs.
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Want to speak to a mortgage adviser? Speaking to an experienced adviser can help you to understand your options and get a great deal on your mortgage.
If you’re looking for expert mortgage advice, you can get a free consultation with an independent mortgage adviser at Fidelius. Speak with a qualified, FCA-regulated, independent mortgage adviser you can trust. Rated 4.7/5 on VouchedFor from over 2,600 reviews.
What will happen to mortgage rates in 2026?
Predicting what will happen to mortgage rates is always a risky business, as no one knows what the future holds, but the signs are that there may be more competitive deals available later in 2026 if the base rate comes down further.
A spokesman for the Mortgage Advice Bureau said: “We’re fairly confident that we’ll continue to see interest rates fall as we go through the course of 2026. Many are predicting we’ll see the Bank of England reduce the base rate to 3.25% or 3.5%, but how quickly we get there will depend on how the economy performs.
“With many historically low fixed-rate deals expiring next year, now is the time to get mortgage advice, especially if your circumstances have changed. Perhaps you need to borrow more money, or maybe you’re worried that your deposit is too small, or that you have a few blips in your credit history. Whatever it is, the chances are there will be the right mortgage for your needs out there.”
Advertisement
Want to speak to a mortgage adviser? Speaking to an experienced adviser can help you to understand your options and get a great deal on your mortgage.
If you’re looking for expert mortgage advice, you can get a free consultation with an independent mortgage adviser at Fidelius. Speak with a qualified, FCA-regulated, independent mortgage adviser you can trust. Rated 4.7/5 on VouchedFor from over 2,600 reviews.
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