We are now in the second month of 2026, and we hope that you are feeling more in control of your finances after last month’s email. If you need a refresher, just hit reply to this email and we’ll guide you through.
This February, we’ve looked around for article inspiration. We keep getting questions about the changing base rate, so we’ve put together an explainer to see how it affects your mortgage. We had a Bank of England (BoE) base rate announcement on 5th February, so perfect timing for a recap. W
Next, we have an article on income protection – especially as recent stats show UK residents have less than £1,000 in savings.
Finally, we also explain how you can use equity release as a gift for first-time buyers.
Let’s take a closer look.
In this blog post:
- What Does the Changing Base Rate Mean for Your Mortgage in 2026?
- Why Protecting Income Matters More Than Ever
- Gifting a First-Time Buyer? Maybe Equity Release Will Help
You might have seen our emails about the Bank of England base rate, or you have been watching it very closely yourself! It’s an important one as it’s the benchmark for borrowing costs across the UK. Lenders use it as one of the inputs when pricing mortgage products. As of early 2026, the base rate has been cut to around 3.75%. It’s the lowest it’s been in nearly three years, after we saw the previous increases, which were aimed at tackling inflation. Economists and lenders are saying they expect one or more rate cuts during 2026 if inflation continues to ease. Remember, forecasts vary, so further cuts are never guaranteed. We’ll hear more on 19th March.
How is your mortgage type affected by the base rate?
- Tracker mortgages: move in line with the base rate (your rate = base rate + a fixed margin). If the base rate falls, your monthly payments usually fall too.
- Standard Variable Rate (SVR) / discount deals: not directly tied but often influenced by the base rate. Lenders may pass cuts on to you, but they don’t have to.
- Fixed-rate deals: your rate won’t change during the fixed term. But when you come to remortgage, the deals available are shaped by base rate expectations.
- If the base rate falls further toward ~3.0–3.5% by late 2026:
- Some mortgage interest rates, especially tracker and some variable deals, are likely to fall too. Experts suggest typical mortgage rates could drift into the low-3s (%) by the end of 2026, which are historically cheaper than recent years.
- If fixed rates fall too, monthly payments on new deals could be lower than they were in 2024–2025. This could make borrowing more affordable for buyers or those remortgaging.
- If the base rate stays relatively flat or only modestly lower (e.g., ~3.5–3.75%):
- Mortgage rates may not fall much, and lenders may compete more on product features such as fees.
- Some borrowers won’t see much difference in monthly costs compared with a year earlier.
If you are a first-time buyer or new borrower, the lower base rates often reduce the headline cost of new mortgage products. It could improve affordability and encourage more borrowing if wages and deposit requirements also move in your favour.
For those remortgaging, if your fixed deal expires in 2026, the rates you’re offered may be lower if base rate cuts have been passed through by lenders. But remember, mortgage pricing also reflects market conditions and lender strategy, so deals can vary widely.
If you are an existing tracker or variable-rate borrower, your payments could drop quickly following a base rate cut – often within a couple of months. But it all depends on how your lender manages the change. If you are an existing fixed-rate holder, your payments won’t change until your deal ends. However, when it comes to an end, you may find new options priced with the 2026 base rate outlook built in.
So where does this leave you?
We can help match the right mortgage type to your circumstances as rates continue to shift. Chat with us today to find the best deal for you.
Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it.
We read something shocking recently. Recent figures show that around 40% of UK residents have less than £1,000 in savings. For many households, that would cover only a few weeks of bills. Nowhere near enough to keep up with mortgage repayments if their income stopped unexpectedly. How do your savings look? Do you think you could last three months without your income?
As brokers, we spend a lot of time helping clients secure the right deal, stress-testing affordability and planning for interest rate changes. But one risk is often underestimated: what happens if the income paying the mortgage disappears due to illness or injury? Think it could be as simple as kicking a football in the garden and breaking your ankle, or the more devastating effects of cancer and rounds of chemo.
From our perspective, discussing income protection isn’t about scaring you. It’s about responsible, holistic advice. Mortgages are paid from income, not from good intentions or long-term plans. Protecting that income helps protect the home you’ve worked so hard to secure. Unfortunately, in our line of work, we see these things more than we’d like to.
Savings can run out quickly. Statutory Sick Pay is limited, and for the self-employed, it may not exist at all. Yet the mortgage payment doesn’t pause just because life takes an unexpected turn. This is where income protection plays a vital role.
Income protection is designed to replace a portion of your income if you’re unable to work, helping you continue to meet essential commitments such as your mortgage, utilities, and everyday living costs. For many clients, especially first-time buyers or those stretching affordability, this can be the difference between staying on track and falling into financial difficulty.
With so many people holding minimal savings, income protection should be seen not as an optional add-on, but as a natural part of the conversation. We are helping you build resilience.
Let’s see how a policy can slot into your life and budget, and help protect your future.
You might have heard of equity release, but did you know it’s a practical and increasingly common way for parents or grandparents to help a first-time buyer get onto the property ladder? Particularly where savings alone aren’t enough, which, in this market, is increasingly likely.
How does it work?
Equity release allows homeowners aged 55+ to access some of the value tied up in their property, usually through a lifetime mortgage. The money released can then be gifted to a child or grandchild to support their home purchase.
Here are some ways it can help…
Boosting the deposit
The most common use is gifting funds to increase the buyer’s deposit. A larger deposit can:
- improve mortgage affordability
- unlock better interest rates
- reduce the need for high-LTV borrowing
Lenders typically require the gift to be non-repayable, confirmed via a gifted deposit letter.
Reducing loan size
Instead of stretching affordability, the gifted amount can reduce how much the buyer needs to borrow, making monthly repayments more manageable.
Supporting family without ongoing repayments
Unlike lending money directly, equity release avoids putting financial strain on the first-time buyer later. There are no monthly repayments required on most lifetime mortgages (unless voluntarily chosen).
Key considerations
- Equity release reduces the value of the estate and can affect inheritance. It may be useful to think of it as an early inheritance for your children and grandchildren.
- Independent financial advice is essential, and we can help with that.
- The first-time buyer’s lender must be comfortable with gifted funds
Used carefully, equity release can be a tax-efficient, flexible way to help the next generation onto the property ladder. Turning property wealth into practical family support, while keeping expectations clear and finances manageable for everyone involved.We’ll go through all your options and the finer details. That’s what we’re here for. Contact us today to get started.
This is a lifetime mortgage. To understand the features and risks, please ask for a personalised illustration. Check that this mortgage will meet your needs if you want to move or sell your home or you want your family to inherit it. If you are in any doubt, seek independent advice.