Angel Thomas
Principal Adviser, In2Equity Ltd
Inflation came in at 2.9% for the latest reading - stubbornly above the Bank of England's 2% target. For mortgage borrowers, the message is simple but unwelcome: the era of sub-2% fixed rates is not coming back, and waiting for it is costing you money.
Why inflation matters to your mortgage
Lenders borrow money to lend to you. The interest they pay is tied to expectations of where the base rate and inflation are heading. When inflation stays high, the Bank keeps the base rate higher for longer, and lenders keep their fixed-rate pricing higher too.
So even though the base rate has fallen from its peak, mortgage rates have not fallen by the same amount - because lenders are pricing in the risk that inflation stays sticky.
What a realistic rate looks like in autumn 2026
Right now, the most competitive 2-year fixes are around 4.1% to 4.4%, and 5-year fixes around 4.3% to 4.7%, depending on your LTV and credit profile. These are not the 1.5% deals of 2021, but they are workable - and they are genuinely cheaper than most standard variable rates, which sit at 7% to 9%.
The danger of waiting
We speak to clients every week who are sitting on their lender's SVR 'waiting for rates to come down'. Here is the maths: on a £250,000 mortgage, the difference between a 4.4% fix and an 8% SVR is roughly £600 a month. If you wait a year for rates to drop 0.25%, you save maybe £40 a month - but you have paid £7,200 extra in the meantime.
Waiting is rarely the winning move. Locking a competitive deal now almost always beats sitting on a variable rate.
What we recommend
If your fixed rate has ended or is ending within 6 months, book a review. We will compare product transfers against the whole market and show you the real numbers. If staying put is cheaper, we will say so. If switching saves you money, we will show you exactly how much.