UK Mortgage Market Update - March 2026
TL;DR – Key Takeaways
Mortgage rates have fallen slightly in early 2026, offering improved opportunities for borrowers.
The Bank of England base rate remains at 3.75%, while inflation has eased to 3%.
Housing supply is increasing, with Zoopla reporting the potential for the highest number of property listings in a decade.
Many homeowners who fixed for two years in 2024 may find lower rates available when their deal ends this year.
Business owners may benefit from Relevant Life Cover, a tax-efficient way to arrange life insurance through a company.
Mortgage rates have eased slightly in early 2026, offering improved opportunities for borrowers.
Introduction - A More Positive Outlook for Borrowers
The UK mortgage market continues to evolve as we move through 2026. For homeowners, buyers and property investors, understanding how interest rates, inflation and housing supply are changing can make a meaningful difference when planning your next move.
Mortgage rates have edged slightly lower so far this year, and affordability rules have gradually improved. Combined with increased housing supply, these factors are creating a more positive outlook for the property market compared to recent years.
In this update, we’ll look at:
What’s happening with mortgage rates
The latest economic signals from the Bank of England
Trends in the housing market
What this could mean for homeowners and buyers
How mortgage porting works if you are planning to move
A useful protection strategy for business owners
Mortgage Market Update – Mortgage Rates Begin to Ease in 2026
Mortgage rates have fallen slightly across the market during the early months of 2026. While changes have not been dramatic, the overall direction has been encouraging for borrowers.
At the same time, lenders have continued to introduce improvements to mortgage affordability assessments, which may allow some buyers to borrow slightly more than they could previously.
Together, these developments have helped create a cautiously optimistic environment for the housing market.
For homeowners whose mortgage deal is ending this year, particularly those who fixed their rate two years ago, this may be welcome news.
In many cases, today’s mortgage rates are lower than they were in early 2024, meaning refinancing options could potentially improve monthly payments or borrowing flexibility.
Reviewing your mortgage ahead of the end of a fixed rate can help ensure you are well positioned to secure a suitable deal before moving onto a lender’s standard variable rate.
Bank of England - Base Rate Holds Steady at 3.75%
The Bank of England’s Monetary Policy Committee (MPC) met on 5 February 2026 and voted to hold the base rate at 3.75%.
Base rate decisions remain a key driver of mortgage pricing across the market.
Alongside this, inflation has continued to fall, reaching 3% in the year to January 2026.
While this is encouraging progress, inflation still remains above the Bank of England’s 2% target, meaning policymakers will likely continue to take a cautious approach when considering future interest rate decisions.
For borrowers, this means mortgage rates may continue to fluctuate as markets respond to economic data and expectations around future base rate changes.
The Bank of England base rate currently stands at 3.75%, influencing mortgage rates across the UK.
Housing Market - More Homes Coming to Market in 202
Recent reports suggest the UK housing market may see increased activity this year.
Property portal Zoopla has indicated that 2026 could see the highest number of property listings in a decade, potentially giving buyers more choice than they have had for several years.
At the same time, early house price data has shown modest growth.
According to recent reports:
Halifax recorded house prices rising 0.7%
Nationwide reported a 0.3% increase
Meanwhile, research from Moneyfacts highlights that first-time buyers now have the widest range of low-deposit mortgage products available in at least 18 years.
Taken together, these factors suggest a market that is gradually becoming more balanced between buyers and sellers.
What This Means for Homeowners and Buyers
For many homeowners, 2026 may present opportunities to review mortgage arrangements and plan ahead.
If your fixed rate is ending within the next 6–12 months, reviewing options early can help you:
understand what new rates may be available
explore remortgaging options
avoid moving onto a higher variable rate
For buyers, increased housing supply and improved mortgage choice could also create a more accessible environment than in recent years.
Every situation is different, so reviewing your options with an adviser can help ensure your mortgage remains aligned with your broader financial goals.
Moving Home? Understanding Mortgage Porting
If you are planning to move home but are currently tied into a fixed rate mortgage, porting your mortgage may be an option.
Porting allows you to transfer your existing mortgage deal to a new property, which can help you avoid paying early repayment charges and retain a potentially favourable interest rate.
However, porting is not automatically guaranteed.
When applying to port your mortgage, the lender will still assess:
affordability
income
credit profile
property suitability
If you need to borrow more money for the new property, the additional borrowing will usually be arranged on a separate mortgage rate, which may differ from your existing deal.
Most mortgage products allow porting, but the exact terms vary between lenders. Reviewing your options early can help you decide whether porting or arranging a new mortgage would be the most suitable approach.
Protection Planning for Business Owners - Relevant Life Cover
For company directors and business owners, Relevant Life Cover can be a highly tax-efficient way to arrange life insurance.
This type of policy is designed specifically for businesses and allows life cover to be arranged through a limited company rather than personally.
In many cases:
premiums are paid by the business
payments may be treated as an allowable business expense
premiums are not typically treated as a benefit in kind
When structured correctly and written in trust, benefits can usually be paid tax-efficiently to beneficiaries.
Relevant Life Cover can be particularly useful for smaller businesses that do not have a group life scheme in place, offering directors and employees access to meaningful protection while maintaining tax efficiency.
If you currently pay for personal life insurance from post-tax income, reviewing whether a Relevant Life Policy could be arranged through your company may be worthwhile.
Why 2026 May Be a Good Time to Review Your Mortgage
Mortgage markets, economic conditions and personal circumstances change over time.
Reviewing your mortgage periodically can help ensure your borrowing continues to support your wider financial plans.
You may benefit from a review if:
your fixed rate ends in the next 12 months
you are planning to move home
you are considering borrowing for property investment
your income or circumstances have changed
Taking a proactive approach can help you make informed decisions rather than reacting to market changes at the last minute.
Mortgage Questions People Are Asking in 2026
Are mortgage rates falling in 2026?
Mortgage rates have eased slightly in early 2026. Movements vary by lender and borrower profile, so it’s worth reviewing your options if your deal is ending soon.
What is the current Bank of England base rate?
As of February 2026, the Bank of England base rate is 3.75%.
When should I review my mortgage?
Ideally 6–12 months before your fixed rate ends. This gives time to compare options and secure a new deal before you move onto your lender’s standard variable rate.
Can I move house while on a fixed mortgage?
Often, yes. Many mortgages allow “porting”, which means transferring your existing deal to a new property, subject to the lender’s affordability and underwriting checks.
What happens if I do nothing when my fixed rate ends?
Most mortgages move onto the lender’s standard variable rate (SVR), which is often higher than available fixed deals. A review in advance can help you avoid unnecessary increases.
What is a Relevant Life Policy?
A Relevant Life Policy is life cover arranged by a limited company for an employee or director. Premiums are paid by the business and can be a tax-efficient way to provide protection.
Who should consider Relevant Life Cover?
It may suit company directors and business owners who currently pay for personal life cover from post-tax income, especially where there is no group life scheme in place.
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Further Reading & References
If you found this update useful, you might also enjoy:
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Turkington Davis is an appointed representative of Rosemount Financial Solutions (IFA) Ltd, which is authorised and regulated by the Financial Conduct Authority.
Your home may be repossessed if you do not keep up repayments on your mortgage.
The information in this article is for general guidance only and does not constitute financial advice. Individual circumstances vary and professional advice should be sought before making financial decisions.
