By Clare Yates
6 min read
Major lenders including HSBC, Nationwide and Halifax kicked off 2026 by cutting some fixed mortgage rates to around 3.5%, sparking a mortgage price war amongst the big lenders. With market expectations pointing to possible further rate falls, homeowners coming off deals this year may have an opportunity to secure more competitive terms.
More than eight-in-ten mortgage customers are on fixed-rate deals. With 1.8 million homeowners’ deals set to expire in 2026, many could take advantage of the new offers hitting the market.
Start early and plan ahead
If there is one golden rule for remortgaging it is this: do not leave it until the last minute.
Lenders usually let you arrange a new remortgage deal up to six months before your current one ends. That can help homeowners to avoid rolling onto the standard variable rate, which is often far more expensive than new deals.
With that in mind, a good rule of thumb is to start three to six months before your deal expires. This gives you breathing room to compare deals, complete paperwork, and address any credit issues without rushing. It also positions you better if lenders get busy around popular expiry dates.
How rate expectations are influencing choices in 2026
Mortgage rates have eased back from the highs seen in 2023 and early 2024, following cuts to the Bank of England base rate. Experts in the industry expect further gradual cuts during 2026, although nothing is guaranteed.
Speaking to MoneySavingExpert, Aaron Strutt of Trinity Financial revealed that he believes the base rate will fall twice this year: “I expect the base rate to come down twice more to 3.25% by the end of 2026. This should lead to cheaper fixed rates and hopefully boost the economy."
Nicholas Mendes of John Charcol added: “The most likely outcome is a small number of cuts rather than a rapid return to ultra-low rates. Inflation is still the swing factor. The important point for borrowers is that much of the expected base rate path is already reflected in fixed pricing."
Speaking to Sky News, Vijay Rabadiya, founder of brokerage The Mortgage Vine said: "If the current trajectory holds, I think mid-3% mortgage products will be achievable by late 2026, with the possibility of high-2% rates only if inflation stays at target for a sustained period. Overall, I see a steady glide path downwards rather than a sudden drop.”
All this leaves homeowners in a tricky spot. Do you lock in now for peace of mind, or wait and hope rates drop a little further? The risk with waiting is that if your current deal ends first, you could spend months paying a much higher standard variable rate.
If a fixed rate is what you want, applying a few months in advance can give extra flexibility. Some lenders allow changes if rates improve before you complete your new deal, while still honouring the original deal if rates rise.
Alternatively, there are tracker mortgages that come with the option to switch to a fixed rate at any time without extra fees or reapplication. This means you could start on a tracker to potentially benefit from falling rates, then lock in a fixed deal later. It’s a way to stay flexible, but do check for any fees - as they differ between lenders - and the wider risks of being on a tracker mortgage (see below).
Fixed or tracker: which feels right in 2026?
If you are remortgaging this year, the fixed versus tracker decision might be the hardest part given the current situation with rates. Both options have clear pros and cons, and the right choice usually comes down to how much certainty you want versus how much flexibility you are comfortable with.
Fixed rate mortgages are popular because they keep monthly payments predictable. That certainty can be reassuring, especially for households adjusting to higher costs than they are used to. The downside is that if rates fall, you will not benefit until your fixed term ends.
Tracker mortgages move in line with the Bank of England base rate – or in some cases, like NatWest, their own base rate – so payments can go up or down. With expectations of further rate cuts, some borrowers are choosing trackers as a short-term option, with the plan to fix later if rates start to rise again.
Fixed rate vs tracker: risks and benefits at a glance:
Fixed rate mortgage | Tracker mortgage | |
What happens to your rate? | Your rate stays the same for the length of the deal. | Your rate moves up and down in line with the lender’s base rate. |
If interest rates fall | Your payments stay the same, even if rates drop elsewhere. | Your payments could fall, which is why trackers are getting attention in 2026. |
If interest rates rise | You are protected. Your payments will not increase during the fixed period. | Your payments can rise at any time, which can make budgeting harder. |
Budgeting | Very predictable and easy to plan around. | Less predictable, as payments can change over time. |
Early repayment charges | Usually apply if you leave the deal early or switch products. | Can apply depending on the lender, but are widely available without any charges. |
Overpayments | Normally capped at a set percentage each year without a charge. | Similar limits usually apply, so flexibility is not guaranteed. |
Flexibility later on | Less flexible if rates fall and you want to switch early. | Some trackers allow you to switch to a fixed rate with the same lender without a charge or reapplication. |
Who it tends to suit | People who value certainty and stable payments. | People comfortable with some risk who want flexibility. |
There is no one-size-fits-all answer here. A fixed rate can feel reassuring if you want stability, while a tracker may suit you if you are willing to accept some movement in return for flexibility and potential savings. The key is choosing a deal that fits your budget and your tolerance for change, not just the lowest headline rate.
Don't ignore fees and total costs
It is tempting to chase the lowest headline rate, but that does not always mean the cheapest deal overall. Arrangement fees, valuation costs and early repayment charges can all have a big impact on what you actually pay.
In some cases, a slightly higher rate with no arrangement fee can work out cheaper once the costs attached to lower rate deals are factored in, especially for smaller mortgages. It’s worth running the numbers and speaking to a mortgage adviser if you are unsure.
Taking a few extra minutes to look at the total cost can stop you paying more than necessary over the life of the deal.
Already on your lender’s standard variable rate? Act quickly
If your fixed deal has already ended and you are on your lender’s standard variable rate, do not panic. You are not stuck, but time really does matter.
Switching to a new deal, either with your existing lender or a new one, can quickly bring payments down. And remember a tracker mortgage with no ERCs can be a handy short-term option, rather than staying on an expensive variable rate while you work out your longer term plan.