The Intermediary – October 2026 - Flipbook - Page 19
RESIDENTIAL
Opinion
The headline rate
doesn’t tell the
whole story
W
ith the average
rate on a new
5-year fixed
mortgage
reportedly
reaching 6% for
the first time in three years, it would
be understandable for borrowers to
assume that competitive sub-5.5%
mortgage rates have disappeared.
However, the headline average only
tells part of the story.
For borrowers, particularly those
with larger deposits, there are still
competitive products available. This is
why the role of the mortgage broker is
so important. At a time when rates are
moving quickly, borrowers should not
simply accept the first rate they see or
assume the average rate represents the
best deal available to them.
Competitive deals
There are currently a number of
major lenders offering 5-year fixed
rates below 5.5% to borrowers with a
10% deposit. Examples include Lloyds/
Halifax at 5.23%, Virgin Money at
5.29%, HSBC at 5.30% and Nationwide
at 5.35%. Borrowers with a 15% deposit
may also be able to access lower rates.
The difference between these
products and a 6% mortgage may
appear relatively small when
expressed as a percentage. But over
a 5-year fixed period, even a modest
difference in the interest rate can have
a meaningful impact on monthly
payments and the overall cost
of borrowing.
This is where brokers can add
real value. Our role is not simply to
find a mortgage; it is to understand
a borrower’s circumstances, assess
their options across the market
and help them make an informed
decision. Borrowers shouldn’t
assume that a 6% average means they
have to accept a 6% mortgage rate.
There are still competitive products
available, particularly for those with
larger deposits, so it’s important to
shop around.
Early advice
The current market is also a reminder
of how quickly mortgage pricing can
change. Just six months ago, some
5-year fixed products were available
at around 4.5%. That represents a
significant movement in a relatively
short period.
For those approaching the end of
their existing fixed rate deal, timing
is particularly important. Leaving the
process until the last minute can leave
borrowers with fewer options and
less flexibility.
Starting the conversation early gives
them an opportunity to understand
what is available, assess affordability
and consider whether securing a
product in advance makes sense for
their circumstances.
If rates continue to rise, securing
a competitive product sooner rather
than later could make a significant
difference to monthly payments.
Look beyond
There is also a danger that borrowers
become focused purely on the
headline interest rate. While rate is
clearly important, it should not be
considered in isolation. Arrangement
fees, incentives, loan-to-value (LTV)
requirements, early repayment
charges (ERCs) and the overall
suitability of the product all need to
be considered.
A mortgage that appears cheaper
because it has a slightly lower interest
rate may not necessarily be the most
suitable option once the wider costs
are taken into account. Equally, a
product with a higher headline rate
SAT SINGH
is owner of Cleerly Lld
could potentially represent beer
value if it comes with a lower fee
or other benefits. Brokers can help
borrowers compare the overall cost
and structure of different deals rather
than simply comparing headline rates.
Borrowers should not be
discouraged by the 6% average. The
market remains competitive in parts,
and lenders are continuing to price
products differently depending on the
borrower’s circumstances, deposit and
LTV position.
Find alternatives
For borrowers with a 10% deposit, the
examples currently available below
5.5% demonstrate that there are still
alternatives to the headline rate. Those
with a 15% deposit may have access to
even more competitive pricing.
Of course, nobody can predict with
certainty where mortgage rates will
go next. That makes it even more
important for borrowers to focus on
what they can control: understanding
their options and taking advice early.
For brokers, this is an opportunity
to demonstrate the value of advice at a
time when borrowers may be feeling
increasingly uncertain. The market
may look very different from six
months ago, but that does not mean
borrowers are powerless. Our job is to
make sure they know what is actually
available to them.
Borrowers should not assume
the headline rate is the rate you
will have to pay. They should shop
around, understand the full cost of
the options available and speak to a
broker early. In a rapidly changing
mortgage market, that could make a
significant difference. ●
October 2026 | The Intermediary
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