UK Mortgage Market Update – 23 March 2026
The UK mortgage market saw some important developments this week as the Bank of England held interest rates, lenders adjusted pricing, and housing market activity remained steady. Here’s what happened this week and what it could mean if you’re planning to buy or remortgage in 2026.
Here’s what changed this week and what it means for you.
- Bank of England holds base rate
- Some lenders increase mortgage rates
- What this means for buyers in 2026
Bank of England holds base rate
The Bank of England held the base rate this month, maintaining its current position as policymakers continue to balance inflation concerns with economic growth. While inflation has been gradually easing, the decision reflects ongoing caution around how quickly rates can be reduced. Mortgage markets tend to move ahead of official decisions, and this week highlighted that clearly. Because mortgage pricing is forward-looking, lenders often adjust rates before any official base rate change.
What this means for borrowers
- The base rate remaining unchanged does not guarantee falling mortgage rates
- Lenders are continuing to price based on future expectations
- Rate movements can still occur even without a base rate change
Mortgage rates don’t automatically fall just because the base rate stays the same.
Mortgage rates: some lenders increase pricing
Despite expectations of future rate reductions, several lenders increased mortgage rates slightly this week. This reflects movements in swap rates and broader market uncertainty, which influence how lenders price fixed-rate products.
Typical market ranges now show:
- Average 2-year fixed: around 4.5–4.8%
- Average 5-year fixed: around 4.7–4.9%
Key takeaway
Mortgage rates do not move in a straight line.
Even in a market where future cuts are expected, short-term increases can still happen.
Interest rate outlook: expectations remain mixed
Market expectations around future rate cuts remain divided. While lower inflation supports the possibility of rate reductions later in 2026, global economic factors and market volatility continue to influence pricing in the short term. Swap rates have shown slight upward movement this week, which has contributed to some lenders increasing rates.
Housing market activity remains steady
The housing market continues to show resilience. Buyer activity has remained steady, with many people returning after delaying decisions during periods of higher interest rates.
Current trends suggest:
- Demand remains strong for well-priced properties
- London and South East markets remain competitive
- Buyer confidence is gradually improving
This continued activity is helping support modest house price growth.
Affordability remains a key factor
Although activity is improving, affordability continues to influence borrowing decisions.
Higher rates compared with previous years mean:
- Borrowing limits remain tighter
- Lender affordability models are critical
- Income assessment varies significantly between lenders
Two borrowers with similar incomes can still receive very different outcomes depending on lender choice.
What we’re seeing from clients this week
Across London and the South East, we’re noticing:
- Buyers returning after waiting during higher-rate periods
- More remortgage enquiries ahead of fixed-rate expiries
- Increased interest in shorter fixed-rate products
- Borrowers focusing more on borrowing capacity than headline rates
Many buyers are also seeking clarity on affordability before making offers.
Oportfolio insight: what this means right now
This week highlights an important point:
- Mortgage rates don’t always fall just because base rates stay the same.
- Lenders price mortgages based on future expectations and market conditions, not just current base rates.
- In many cases, choosing the right lender has a bigger impact than trying to time the market.
What this means if you’re buying vs remortgaging
If you’re buying:
With demand remaining steady and some lenders increasing rates, waiting for significantly lower pricing may not always improve your position. Understanding your borrowing capacity and securing the right lender early can put you in a stronger position.
If you’re remortgaging:
Many homeowners are now reviewing options earlier, especially as some lenders adjust pricing. Securing a rate in advance (often up to six months early) can provide flexibility and protection against further increases.
Need clarity on what this means for you?
Every borrower’s situation is different, particularly in London where property values and loan sizes are higher.
If you’re unsure how much you could borrow, you may also find our how much can I borrow mortgage guide helpful.
If you want to understand:
- What you could realistically borrow
- Which lenders are currently competitive
- Whether now is the right time to act
Book a quick affordability review with Oportfolio Mortgages and we’ll give you clear, lender-backed guidance.
