David Fell, lead analyst at Hamptons, said: “2026 marks the beginning of the end for cheap money in the housing market.
“Anyone who fixed their mortgage for five years during the post-Covid housing boom will be rapidly reorienting themselves into a world of higher interest rates in 2026.
“While these borrowers will see their mortgage payments rise this year, in hindsight, the decision to fix for five years was a wise one.
“They remain better off than those who fixed for two years and have already been paying higher mortgage rates for the last three years.
“And the rates they will be rolling onto this year are much lower than if they had to re-mortgage in either 2024 or 2025.
“On the other hand, 2026 will bring relief for households who took out two-year fixes in 2024.
“Falling interest rates will mean these two-year borrowers should see their mortgage rate start with a three or a four instead of a five or a six.
“For anyone falling off a two-year fixed deal, lower rates and falling arrangement fees should reduce mortgage payments for a typical borrower by at least a couple of hundred pounds a month.
“While former first-time buyers who stretched themselves may find themselves with even more cash left over at the end of the month.”
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