Mortgage market update | October 2026

It's been a busy few weeks on the re-mortgage side, and I've had some interesting conversations with clients about rates and the options available to them.

One thing that's stood out is the difference between the mortgage rates people are seeing in the headlines and what we're actually finding when we look at their circumstances.

Are Mortgage Rates Really 6%?

A number of clients have started recent meetings asking whether they're going to end up on a new mortgage deal at 6%, having read some articles online.

Understandably, that's worrying, particularly if they're coming off a much lower fixed rate.

Rates are certainly higher than many clients have been used to over the last few years, and the deals I've been looking at have generally been above 5%. But I haven't recommended a single 6% deal to a client, even at higher loan-to-values.

That's not to say everyone will qualify for a lower rate. It all depends on their circumstances, but it shows why it's worth looking beyond the headlines.

And let's be honest, the media do love a good clickbait headline!

Why More Clients Are Considering Trackers

Something else I've noticed recently is that more clients are open to tracker mortgages.

The reason is fairly simple. In some cases, the trackers I've been looking at have been more than 1% cheaper than comparable fixed-rate deals. That's quite a difference.

Clients are looking at that gap and thinking about how much rates would need to rise over the next couple of years before they'd have been better off fixing. Of course, it's not just how much rates rise, but when they rise that matters.

What's been particularly interesting is how some clients are planning for that uncertainty.

Rather than spending the monthly saving, some are choosing to pay the equivalent of the higher fixed-rate payment, using the difference to reduce their mortgage balance, where their lender allows it.

Others are putting the difference into a separate savings pot, giving themselves a buffer if their monthly payments increase.

I like both approaches. They're ways of making the most of the lower payments while preparing for the possibility that rates rise.

Of course, trackers aren't for everyone. Payments can increase, and there's a lot to be said for knowing exactly what you'll pay each month.

But with the price differences we're currently seeing, they're definitely worth considering.

House Prices: Not Much Movement

The latest Nationwide and Lloyds house price reports suggest the market remains fairly flat.

Nationwide reported a 0.2% monthly fall in September, with prices up 0.8% over the year. The Lloyds index showed no change on either measure.

Personally, I still think we could see prices coming down over the coming months as more sellers realise that the price they've got their heart set on achieving isn't necessarily what buyers are prepared to pay.

Looking ahead, I'm not expecting a huge amount to change before the end of the year.

We've got the Budget coming up, which could have an impact, but before we know it, we'll be counting down to Christmas.

My feeling is that we might see more activity in the new year, particularly if mortgage rates remain around their current levels and people return to the market with fresh plans.

I'm usually the eternal optimist when it comes to the property market, but even I'm starting to think there could be a bit more pain for house prices before things improve.

Help to Buy 2.0?

The government has announced plans for a new first-time buyer scheme called Your First Home, with further details expected in the Budget on 28 October.

From what's been announced so far, the proposal is for buyers to put down a 2.5% deposit, with a 20% government-backed equity loan and a mortgage covering the remaining 77.5%.

The equity loan would initially be interest-free, and the scheme is expected to focus on eligible first-time buyers purchasing new-build homes in England.

My initial reaction? It sounds an awful lot like the old Help to Buy scheme.

I suspect there will be plenty of developers welcoming the news, particularly those with new-build properties they're struggling to sell.

But will it really help the wider housing market, or mainly support the sale of new-build homes?

As always, the devil will be in the detail. We still need to understand who qualifies, how the equity loan works longer term and what the actual costs will be for buyers.

I'll be interested to see what comes out of the Budget in two weeks.

Risk warnings

Your home may be repossessed if you do not keep up repayments on your mortgage