The UK mortgage market is experiencing significant shifts as new affordability rules from the FCA encourage more borrowers to switch lenders. Recent research indicates that 98% of modified affordability assessments in Q1 2026 were used for external remortgages, highlighting the impact of these changes on consumer behaviour.
How are lenders responding to rising costs in the mortgage market?
Several major UK lenders, including Barclays, Halifax, HSBC, TSB, and Skipton, have recently increased selected mortgage rates by up to 20 basis points. This trend is a direct response to rising swap rates, which have increased funding costs for these institutions. NatWest has also announced similar price hikes for both residential and buy-to-let mortgages, further indicating a tightening in the mortgage market.
What does the surge in switching mean for borrowers in the mortgage market?
The FCA’s new affordability rules are allowing more borrowers to switch to different lenders rather than sticking with their current providers. This shift is particularly beneficial for those looking to secure better deals in a fluctuating market. With a significant percentage of borrowers now able to remortgage, it’s essential for them to stay informed about the latest rates and options available. For those considering a switch, comparing mortgage rates can be important in finding the best deal.
What changes are happening with major lenders in the mortgage market?
In addition to raising rates, lenders like Santander are expanding their offerings, including new 10-year fixed deals and options for new builds. Meanwhile, Accord Mortgages is adjusting many of its residential and buy-to-let rates, with some products seeing reductions. Newcastle for Intermediaries has also relaunched its joint borrower sole proprietor mortgage range, indicating a competitive environment as lenders adapt to market conditions.
What this means for landlords and investors in the mortgage market
For landlords and property investors, the recent changes in the mortgage market signal a need for vigilance. With many lenders increasing rates, the cost of borrowing is likely to rise, impacting profitability. However, the surge in remortgaging opportunities may allow savvy investors to secure better terms or refinance existing loans. Keeping an eye on current mortgage rates and understanding the implications of new affordability assessments will be vital for making informed decisions.
Frequently asked questions
What should borrowers consider when switching lenders?
Borrowers should evaluate the full cost of switching, including any fees, the new interest rates, and the terms of the mortgage. Additionally, they should consider how the new lender’s affordability assessments will impact their borrowing potential.
How can landlords manage rising mortgage costs?
Landlords can manage rising mortgage costs by reviewing their current mortgage arrangements, exploring remortgaging options, and considering fixed-rate deals to lock in lower rates for the long term. Staying informed about market trends is also important for making strategic investment decisions.