Homeowners looking for a new mortgage deal will find a range of attractive offers available right now, though experts caution that the 'cheapest' rate is rarely the most suitable.
Since the Bank of England’s base rate cut to 3.75 per cent in December 2025, there’s been a significant price war among high-street lenders for the start of 2026 - but financial experts stress getting the lowest interest rate doesn’t necessarily mean you’re getting the best overall deal.
“For those searching for mortgages independently, it’s easy to be drawn in by the headline interest rate,” Rachel Geddes, strategic lender relationship director at the Mortgage Advice Bureau, said.
“However, the ‘cheapest’ rate is rarely the most suitable deal.
“The most common pitfall for DIY searchers is the fee-to-rate ratio. A lender might offer a highly competitive rate, but if it comes with a costly arrangement fee, you could end up paying more over the fixed term than you would with a slightly higher rate and no fee.”
And Hannah McEwen, Money Saving Expert’s money editor, says: “Major lenders have kicked off 2026 by cutting fixed mortgage rates. That’ll come as welcome news for many of the 1.8 million people whose fixes are due to end this year, especially if they locked in at a higher rate over the past few years.”
She says overall, mortgage deals have been edging down recently. In mid-January, the cheapest two-year and five-year fixed rates on the open market were around 3.5 per cent and 3.7 per cent respectively – lower than at any point in 2025.
“This time last year, both were closer to 4.2 per cent,” she says. “But when choosing a mortgage deal, it’s about finding the right balance between three key factors: the interest rate, any arrangement fees, and how long you want to fix for.
“It’s crucial to use a whole-of-market comparison tool, ideally one that shows deals available both direct from lenders and via mortgage brokers, so you’re not missing out on some of the best options.”
Don’t try to time it perfectly
Although there’s been a consistent downward trend over the last six months, and this is expected to continue throughout 2026, shifts in the global market can impact pricing at any time, says Geddes, and the best time to get a mortgage is simply down to a borrower’s circumstances and when they’re ready to move.
“Early January has seen lenders aggressively reducing rates to capture new business,” she says. “While analysts predict another two rate cuts this year, I’d caution against trying to time the market perfectly.
“Mortgage pricing is influenced by swap rates [which reflect where lenders think the base rate is heading over the next two to five years] and geopolitical factors that can fluctuate overnight, so if you find a rate that makes your move affordable, securing it now is far wiser than gambling on a further 0.1 per cent drop that may never materialise.”
Be sure your finances are in order
Geddes warns borrowers they need to be aware that underwriting has become far more complex, and explains: “Lenders aren’t just looking at your salary, they’re auditing your lifestyle.
“Closer attention is being paid to discretionary spending, such as recurring subscriptions and high-frequency small transactions, which can impact your affordability. Before you start searching for a property, make sure to tidy up your bank statements for at least three months to demonstrate you can handle future repayments with ease.”
Check the flexibility of the mortgage
Geddes says another critical factor often overlooked is the flexibility of the product.
“In an environment where rates are falling, you don’t want to be locked into a deal that restricts your future options,” she says. “Check the early repayment charges (ERCs) – if your circumstances change, those exit fees can run into the thousands, wiping out any initial savings from a low rate.
“Ultimately, while searching for a deal yourself may give you a top-level overview, it doesn’t show you what you’re eligible for. This is where professional advice is invaluable. A broker doesn’t just find the rate – they’ll help secure you the most suitable deal for your individual circumstances.
“In this market, the most competitive deal isn’t just about the lowest monthly repayment, it’s about a strategy that fits your long-term financial health.”
How long to fix for
McEwen says at the moment, rates on many five-year fixes aren’t much higher than two- or three-year deals, so there’s no one-size-fits-all answer to how long to fix your mortgage for.
“Shorter fixes give you flexibility to switch your deal again sooner, while longer fixes offer payment certainty,” she points out. “Just make sure the term fits your plans – for example, a 10-year fix can be poor value if you expect to move, as early-repayment charges can be eye-watering.”
Always take fees into account
Fees matter too, stresses McEwen.
“Some of the cheapest headline rates come with hefty arrangement fees, which can wipe out savings – especially if you regularly remortgage every two or three years.”
Beware falling onto the Standard Variable Rate
If your current fixed deal is ending, McEwen stresses it’s important to avoid falling onto your lender’s Standard Variable Rate (SVR), which is usually far more expensive.
She says most lenders let you secure a new deal three to six months before your fix ends, and you can either take a product transfer with your existing lender or remortgage to a new lender.
“Product transfers are often quicker and involve less paperwork, as lenders might not need to do a full affordability assessment if your circumstances are the same. However, they don’t always offer the best rates, so it’s worth comparing them against the wider market. If you remortgage elsewhere, you’ll usually get access to more deals, but it can involve more checks and admin.
“This is where a good mortgage broker can be useful – particularly if your situation isn’t straightforward, you’re self-employed, or you’re buying an unusual property. Some brokers are fee-free, though always check how they’re paid.”
Consider a tracker mortgage
If you’re nearing the end of a fixed mortgage and don’t want to lock into another one straight away, a tracker mortgage can be a reasonable stop-gap, says McEwen.
“Trackers move in line with the base rate, and while they’re not as cheap as the best fixes, they’re often far better than a lender’s SVR. Many are also free of early repayment charges, giving you flexibility to switch to a fix later if rates fall further.”
Martin Lewis reveals how to get up to £250 with latest bank switching offers
Experts predict UK mortgage market ‘boom’ in 2026
The savings ‘ladder’ trend exposing a generational divide in what we do with our cash
When is the best time of the year to put your home up for sale?
Scams are impersonating government aid - here’s how to spot the fakes
