What It Means for Remortgaging in 2025–2026

Budget 2025: What It Means for Remortgaging in 2025–2026

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Quick Summary

  • Falling inflation and a more stable economic outlook mean fixed remortgage rates are expected to keep drifting down.
  • Tracker deals may drop again if the Bank of England cuts rates further this year.
  • Affordability should improve as lenders update their cost-of-living models.
  • Many homeowners coming off 2020–2022 low fixed rates will still see a payment jump — but the Budget softens the blow.
  • Best strategy for many: secure a new rate now, then re-book if cheaper options appear.

1 | Why the Budget Matters for Remortgaging

The Budget doesn’t set mortgage rates — but it does shape the economic landscape lenders use to price them.

Budget 2025 reinforced three big themes:

✔ Lower inflation

✔ A calmer economic outlook

✔ No shocks to taxes / housing policy

These all help bring down borrowing costs for lenders, which then filters into remortgage pricing.

2 | How the Budget Affects Fixed Remortgage Rates

Fixed rates follow the swap market, not the base rate.
Lower inflation → lower swap rates → cheaper fixed deals.

Expect through 2025:

  • Slow, steady reductions in 5-year fixes
  • Gradual improvements in 2-year fixes
  • 60% & 75% LTV bands seeing the strongest price cuts
  • More competition from challenger banks (who react faster to market changes)

If your deal ends in the next 3–9 months, this is good news.

3 | Impact on Tracker vs Fixed Remortgage Choices

With inflation easing and the economy stabilising:

Trackers

  • Already benefitted from the recent base-rate cut
  • May fall again if the Bank cuts further
  • Suit borrowers who want flexibility and can handle ups/downs

Fixed Rates

  • Becoming cheaper
  • Safer for budgeting
  • Likely to keep drifting lower through the year

Most homeowners are opting for fixed deals, but trackers are worth considering short-term if cuts are likely.

4 | How Affordability Changes for Remortgagers

Lenders apply affordability checks even on remortgages (unless it’s a like-for-like product transfer).

Lower inflation + lower predicted household costs =

✔ Higher usable disposable income

✔ Less harsh affordability stress tests

✔ Better outcomes for borrowers who were borderline before

If your income hasn’t changed much but your bills have, you may now pass affordability where you previously failed.

5 | What If Your Property Value Has Dropped?

With the last couple of years being unpredictable, some homeowners now have:

  • Higher loan-to-value (LTV)
  • A lower equity position
  • Limited access to the best rates

Budget 2025 won’t fix this overnight, but falling mortgage rates help reduce payment jumps — even at higher LTVs.

Top tip:

👉 Get a fresh valuation from multiple lenders

Some are valuing more generously now the market is stabilising.

6 | Should You Remortgage Now or Wait?

Remortgage now if:

  • Your fix ends within 6 months
  • You prefer certainty
  • Your credit file is clean
  • You want to secure a rate and keep the option to re-book later

Wait (a little) if:

  • You’re about to improve your LTV band (e.g., 86% → 85%)
  • You expect income changes soon
  • You want to see how lenders adjust pricing after the Budget

Best strategy for most people:

👉 Secure a rate now — switch to a cheaper one if they drop further.

Most lenders allow this quietly through brokers.

7 | What Lenders Are Doing After the Budget

We’re already seeing:

  • Lower fixed-rate funding costs
  • More competitive 5-year remortgage products
  • Eased affordability models (slowly)
  • Increased remortgage incentives (free solicitors, cashback)
  • Better product-transfer pricing for existing customers

As the market stabilises, lender competition tends to heat up — which is great for borrowers.

8 | Final Thoughts

If your current mortgage deal expires this year or next, the 2025 Budget has:

  • Improved affordability
  • Strengthened the outlook for cheaper rates
  • Made remortgaging slightly less painful than feared
  • Opened the door to better fixed options over the coming months

It’s still a payment increase for many — but the worst-case scenarios of 2023–24 are firmly behind us.

📞 Want to Check Your Remortgage Options?

We don’t provide advice directly — but we can introduce you to a specialist mortgage adviser who can:

  • Compare the best fixed and tracker remortgage deals
  • Forecast how upcoming rate cuts could affect you
  • See if your affordability has improved post-Budget
  • Secure a rate now and monitor for future reductions

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