One in three first-time buyers eyeing variable mortgages

Adam French, Head of Consumer Finance 01603 476154 Email Adam

Almost one in three first-time buyers considering variable or tracker mortgages

Almost one in three first-time buyers were considering variable and tracker mortgages in July as higher fixed rates push homebuyers to rethink how they finance their first home, new Moneyfactscompare.co.uk analysis has found.

Almost one in three first-time buyers considering variable or tracker mortgages

In July, 31.3% of first-time buyers (FTBs) researching mortgages on Moneyfactscompare.co.uk were considering variable or tracker mortgages, compared with just 9.5% in February.
The proportion had remained below 10% throughout the spring before climbing as fixed mortgage rates increased.
The Moneyfacts Average New 90% loan-to-value (LTV) two-year fixed mortgage rate increased from 5.09% in February to 5.74% in July.
For a FTB borrowing £200,000 over a 25-year term, this means monthly repayments have increased from around £1,180 to £1,257. Despite rates easing back from their April peak, borrowers are still paying around £924 more per year than they would have been in February.
The average new two-year 90% LTV tracker rate stood at 4.80% in July, resulting in monthly repayments of around £1,146 on the same loan. A saving of around £111 per month, or more than £1,300 a year, compared with the average equivalent fixed-rate mortgage.

In July, 31.3% of first-time buyers (FTBs) researching mortgages on Moneyfactscompare.co.uk were considering variable or tracker mortgages, compared with just 9.5% in February.
The proportion had remained below 10% throughout the spring before climbing as fixed mortgage rates increased.
The Moneyfacts Average New 90% loan-to-value (LTV) two-year fixed mortgage rate increased from 5.09% in February to 5.74% in July.
For a FTB borrowing £200,000 over a 25-year term, this means monthly repayments have increased from around £1,180 to £1,257. Despite rates easing back from their April peak, borrowers are still paying around £924 more per year than they would have been in February.
The average new two-year 90% LTV tracker rate stood at 4.80% in July, resulting in monthly repayments of around £1,146 on the same loan. A saving of around £111 per month, or more than £1,300 a year, compared with the average equivalent fixed-rate mortgage.

Adam French, Head of Consumer Finance at Moneyfactscompare.co.uk, said:

"The big jump in first-time buyers researching tracker mortgages reveals the pressure higher fixed rates are putting on the budgets of hopeful homebuyers. For many borrowers, saving more than £100 a month compared with a fixed-rate deal could make the difference between being able to buy a home or delaying their plans.

"Right now, many tracker mortgages look attractive because they are priced at around one percentage point above the Base Rate, making them noticeably cheaper than equivalent fixed-rate products. However, borrowers need to remember that today's monthly payment is not guaranteed to last.

"Money markets are currently pricing in a couple of Base Rate hikes over the coming months. If those expectations prove correct, tracker mortgage repayments will rise too. Recent years have also shown how our volatile times can quickly move the outlook for interest rates, so anyone considering a variable mortgage needs to ensure they have enough room in their budget to cope with higher monthly repayments.

"While some borrowers may be prepared to accept that uncertainty in return for lower initial costs, others will value the security of knowing exactly what they'll pay each month. The right choice ultimately depends on individual circumstances, but anyone stretching themselves to get onto the property ladder should carefully consider whether they can still afford their mortgage payments if interest rates move higher."

Adam French, Head of Consumer Finance at Moneyfactscompare.co.uk, said:

Share of FTBs researching variable & tracker rate mortgages vs fixed on moneyfactscompare.co.uk

Month	Share (%)
February 2026	9.5%
March 2026	6.7%
April 2026	7.5%
May 2026	7.7%
June 2026	17.4%
July 2026	31.3%
Monthly share of users of moneyfactscompare.co.uk comparing first-time buyer mortgage products. Users can compare multiple product types and terms per session. Source: Moneyfactscompare.co.uk

	Two-year fix (90% LTV)		Two-year tracker (90% LTV)
Month	Avg rate	Cost	Avg rate	Cost
February	5.09%	£1,180	4.77%	£1,143
July	5.74%	£1,257	4.80%	£1,146
Difference	+65bps	+£77 per month	+3bps	+£3 per month
Median monthly average rates at 90% LTV. Source: Moneyfactscompare.co.uk

Share of FTBs researching variable & tracker rate mortgages vs fixed on moneyfactscompare.co.uk

Month	Share (%)
February 2026	9.5%
March 2026	6.7%
April 2026	7.5%
May 2026	7.7%
June 2026	17.4%
July 2026	31.3%
Monthly share of users of moneyfactscompare.co.uk comparing first-time buyer mortgage products. Users can compare multiple product types and terms per session. Source: Moneyfactscompare.co.uk

	Two-year fix (90% LTV)		Two-year tracker (90% LTV)
Month	Avg rate	Cost	Avg rate	Cost
February	5.09%	£1,180	4.77%	£1,143
July	5.74%	£1,257	4.80%	£1,146
Difference	+65bps	+£77 per month	+3bps	+£3 per month
Median monthly average rates at 90% LTV. Source: Moneyfactscompare.co.uk

Notes to editors

You are welcome to use part or all of this press release, so long as we are sufficiently sourced. We would appreciate a link back to Moneyfactscompare.co.uk.

Pioneering financial comparison technology for over 35 years, Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, banking, life, pension and investment products in the UK.

Moneyfactscompare.co.uk is the financial product price comparison site, launched as Moneyfacts.co.uk in 2000 and rebranded to Moneyfactscompare.co.uk in 2023, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, Moneyfactscompare.co.uk shows whole of market data regardless of commercial bias, showing consumers a true picture of the best products based on the criteria they select.

For more information about us please see our key facts.

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Notes to editors

You are welcome to use part or all of this press release, so long as we are sufficiently sourced. We would appreciate a link back to Moneyfactscompare.co.uk.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, banking, life, pension and investment products in the UK.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

If you're looking for extra comment, a chart or more information, then please give us a call. We are always more than happy to help.

Adam French Head of Consumer Finance

01603 476154

Email Adam

Rachel Springall Finance Expert

01603 476210

Email Rachel

Caitlyn Eastell Personal Finance Analyst