Modest house price growth may offset easing mortgage costs for home buyers this year
January 7, 2026
Analysis of new data* from Moneyfactscompare.co.uk illustrates how easing mortgage rates may allow for a modest growth in house prices in 2026 without improving or worsening current affordability pressures on first-time buyers and homemovers.
*Consumers comparing mortgage deals on moneyfactscompare.co.uk in 2025 and Moneyfacts Average Mortgage Rates.
First-time buyers
- Typical first-time buyers borrowed around £236,000 in 2025
- Average property value of around £310,000
- Average loan-to-value (LTV) of 78% // Avg deposit of 22%
Homemovers
- Typical homemover borrowed around £251,000 in 2025
- Average property value of around £466,000
- Average LTV of 58% // 42% equity
Remortgage borrowers
- Typical remortgage customer borrowed around £215,000
- Typical property value of around £460,000
- Average LTV of 50% // 50% equity
Average mortgage rates
Markets currently predict the Bank of England will lower the Base Rate from 3.75% to 3.25%-3.5% this year.
| Product / Scenario | 1 Jan 2026 | End of 2026 |
| 90% LTV 2-yr fix | 5.09% | 4.80% |
| 80% LTV 2-yr fix | 4.80% | 4.50% |
| 60% LTV 2-yr fix | 4.28% | 4.00% |
| First-time buyer at 80% LTV | Borrow £236,000 → £1,352 per month | Borrow £241,900 → £1,345p er month |
| Homemover at 60% LTV | Borrow £251,000 → £1,364 per month | Borrow £257,275 → £1,358 per month |
| Remortgage at 60% LTV | Borrow £215,000 → £1,168per month | Borrow £215,000 → £1,135 per month |
|
Source: Moneyfacts. Average mortgage rates assume a 0.25 percentage point Base Rate cut. Mortgage repayments assume repayments over 25 years. FTB and homemover figures assume 2.5% annual house price growth as forecasted by OBR. |
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