Mortgage market set for strong growth in 2026, says Moneyfacts
According to Moneyfacts’ latest UK Mortgage Trends Treasury Report, total mortgage product choice rose month-on-month to 7,158 deals.
The mortgage market is entering 2026 with renewed momentum, supported by falling rates, rising product availability and improving affordability signals for borrowers, data from Moneyfacts has revealed.
According to Moneyfacts’ latest UK Mortgage Trends Treasury Report, total mortgage product choice rose month-on-month to 7,158 deals, an increase of 650 products compared with a year earlier.
This is the highest level of availability since October 2007, with options at 90% and 95% loan-to-value (LTV) now close to 18-year highs, improving access for borrowers with smaller deposits.
Mortgage activity through 2025 also extended the average shelf-life of a mortgage product to 21 days, reflecting both strong demand and a more competitive pricing environment.
Fixed mortgage rates have remained below 5% as 2026 begins, with the average 2-year fixed rate falling to 4.83% in January, while the average 5-year fixed rate held steady at 4.91%.
The overall Moneyfacts Average Mortgage Rate declined to 4.87%, down from 4.91% the previous month and 0.53% lower than January 2025.
Tracker rates also continued to ease, with the average 2-year tracker falling to 4.44%, helped by cuts to the Bank of England Base Rate.
Remortgage conditions are also improving, as fixed rates continue to undercut lenders’ revert or Standard Variable Rates (SVRs).
The average SVR now stands at 7.25%, down from 7.81% a year ago, increasing the incentive for borrowers to switch deals as fixed terms end.
Rachel Springall, finance expert at Moneyfacts, said: “Borrowers and lenders will be in a state of optimism, off the back of a positive 12 months for the mortgage market in 2025. Expectations are high for a booming market in 2026.
“Mortgage rates are lower year-on-year, and the choice of deals is abundant. The relaxation in stress testing and expectations for further rate cuts will help ease the affordability constraints on borrowers.
“First-time buyers are not being left behind by this progress, as deals aimed at those with a low deposit now stand at their highest levels for almost 18 years, yet more progress to support underserved buyers would be welcomed amid a lack of affordable housing.”
She added: “Innovation is set to become a key talking point this year, as expanding options for first-time buyers and modernising regulation are some of the key themes to be reviewed by the Financial Conduct Authority, laid out in its ‘Roadmap’ for the mortgage market.
“The start to a New Year is typically a slow burner for mortgage re-pricing, but lower swap rates should incentivise lenders to pass on rate cuts in the coming weeks.
“As we have seen over the past few months, fixed rate cuts have been in abundance, fuelling healthy drops to the average two-year fixed mortgage rate, and many lenders appeared to pass on cuts by the Bank of England ahead of reductions to the base rate.
“Amid hopes of more cuts to come among borrowers, the appetite for a shorter-term fixed deal could outweigh the appeal of longer-term fixed mortgages.”
She concluded: “Remortgage customers stand to make substantial savings when moving off a revert rate if they switch to a two-year fixed deal. Moving off the average revert rate of 7.25% to the average two-year fixed rate at 60% LTV of 4.28%, remortgage customers could save over £5,000 in repayments over one year, based on a mortgage of £250,000 over 25 years.
“As it stands, there is a rate difference of 0.28% on the average two-year fixed deal at 60% LTV versus the five-year fixed equivalent, so a shorter term may seem more appealing for those coming off a low fixed rate.
“UK Finance expects a 10% rise in external remortgaging in 2026, and 1.8 million fixed rate mortgages are due to come to an end this year. However, some of these will include buyers who managed to lock into a cheap rate in 2020, so they will need to seek advice for support if they are concerned about rising repayments by moving onto a higher fixed rate.”
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