Borrowers expecting mortgage rates to drop have hopes dashed

Here is a story making headlines in the economy: Borrowers expecting mortgage rates to drop have hopes dashedImage source, Getty ImagesByKevin Peachey Cost of living correspondentPublished8 September 2026Nearly all the major mortgage lenders in the UK have announced increases in the cost of home loans in recent days. Analysts are uncertain over whether there are more to come, but are urging people who need to find a new deal to act now. Someone whose five-year deal is coming to an end faces paying more than £5,000 more a year on their next deal under a typical rate, if they borrow the same amount of money.

Many lenders allow people to lock in a new deal six months before their current one comes to an end, with an opportunity to switch if the costs come down before it kicks in. "Borrowers expecting mortgage rates to drop in the coming weeks have had their hopes dashed," said Rachel Springall, from financial information service Moneyfacts. "It is still essential borrowers do not delay seeking advice to navigate the mortgage maze.

Economic Details

" How much could my mortgage payments change? How much are you borrowing? If you have an existing mortgage enter the outstanding balance left to pay.

If not, enter the total you are looking to borrow. £ How long will you take to pay it back? If you have an existing mortgage enter the total number of years remaining.

If not, enter the total number of years you are looking to borrow over. years What is your current... For those with a mortgage enter the rate for your current fixed term.

Analyst Views

For those without a mortgage enter an interest rate from another source, such as a bank's mortgage rate calculator. interest rate monthly payment interest rate % Choose an interest rate to compare with… % At this rate, your payments could change by… monthly change to monthly total The information you provided on your monthly payments would not be sufficient to pay off your mortgage within the number of years given. This calculator does not constitute financial advice.

It is based on a standard mortgage repayment formula dependent on the mortgage size and length and a fixed interest rate. It should be used as a guide only and does not represent the suitability, eligibility or availability of mortgage offers for users. For exact figures, users will need to approach an official mortgage lender.

Interest rates fluctuate based on the Bank of England's base rate and market conditions For borrowers, the interest rate on a fixed mortgage does not change until it expires, usually after two or five years, and a new one is chosen to replace it. The vast majority of homeowners and buyers have this kind of mortgage. Since the Iran war began, global economic uncertainty has pushed up the cost of deals.

Economists are analysing what the news means for the markets.