Banks forecast 2% growth in mortgage lending next year, with borrowers urged to act quickly
Banks expect only modest growth in mortgage lending as higher rates constrain borrowing; homeowners and buy-to-let investors advised to lock in rates and compare options promptly.
Mortgage lending is expected to grow by just 2% next year, according to banks. Borrowers whose fixed-rate deals are due to expire or who are buying a home should explore their options as soon as possible, while buy-to-let landlords should act promptly as well.
The forecast reflects ongoing affordability pressures as higher borrowing costs squeeze households and slow demand in the housing market. Homeowners can lock in a new deal six to nine months in advance, often with no obligation to accept. This can help provide certainty about monthly payments in a market where rates can move quickly. Many mortgage deals allow fees to be added to the loan and charged only when the loan completes, meaning borrowers can secure a rate without paying up-front arrangement fees. However, if the fee is financed and not cleared on completion, interest will be paid on the fee over the full term of the loan, which may not be the best option for everyone.
For those buying a home, securing a rate early helps lock in predictable monthly payments. Buyers should avoid overstretching and be mindful that house prices may fall in a higher-rate environment, which can reduce borrowing power and overall buying capacity.
Buy-to-let landlords face particular pressure, especially those with interest-only mortgages. They are likely to see larger jumps in monthly costs than residential borrowers, making early remortgaging essential. Our partner L&C can assist with buy-to-let mortgages as well, offering a pathway to compare options in the market.
The most effective way to compare mortgage costs and find the right deal is to work with a broker. This is Money has a long-standing partnership with fee-free broker London & Country Mortgages (L&C) to provide expert mortgage advice at no direct cost to the borrower. For those ready to explore today’s rates, This is Money’s mortgage tools, paired with L&C’s resources, can help identify deals that match home value, loan size, term, and fixed-rate preferences. If you’re ready to search, L&C’s online Mortgage Finder can scan thousands of deals from more than 90 lenders to surface options that fit your situation. Keep in mind that rates can change quickly, so it’s wise to act promptly to avoid missing favorable terms.
Mortgage service is provided by London & Country Mortgages (L&C), which is authorised and regulated by the Financial Conduct Authority (registered number: 143002). The FCA does not regulate most Buy to Let mortgages. Your home or property may be repossessed if you do not keep up repayments on your mortgage.
In a market where rates continue to move and lenders periodically adjust terms, borrowers are advised to consult a broker early and often to understand current conditions and to be prepared to respond quickly when a suitable deal appears. For buyers, proactively monitoring the rate environment and obtaining pre-approval where possible can help maintain flexibility as plans evolve. For landlords, evaluating remortgage options well ahead of current loan expiries can help minimize disruption to rental operations and maintain cash flow in a potentially tighter financing landscape. The key message from lenders and mortgage advisers remains clear: act sooner rather than later to lock in rates and avoid the risk of rising costs or tightened lending criteria as markets shift.