With party conference season over, the question for homeowners and would-be buyers is simple: what does it all mean for my mortgage? Inflation has edged back up to 3.1%, the Bank of England has held interest rates at 3.75%, and long-term government borrowing costs remain stubbornly high. Here, the team at Grange Mortgages explains where things stand and what you can do now, whether you already have a mortgage or are hoping to buy your first home.
The Labour conference: the economy takes centre stage
This year’s Labour conference came at a delicate moment for the economy. Ministers used the week to restate their commitment to economic stability, tight control of public finances and growth, with housing once again framed as a central part of that growth story.
The government’s ambition of 1.5 million new homes this Parliament, backed by planning reform, remains the backdrop. With the Autumn Budget still to come, many details will only be confirmed in the weeks ahead, but there’s no need to put decisions on hold waiting for it. The fundamentals below matter far more to your monthly payments.
The cost of living: inflation is creeping back up
Figures from the Office for National Statistics show Consumer Prices Index (CPI) inflation rose to 3.1% in the 12 months to August 2026, up from 2.9% in July, with the broader CPIH measure, which includes housing costs, at 3.3%. Much of the renewed pressure traces back to energy, after conflict in the Middle East pushed up oil and gas prices earlier this year.
For homeowners, this matters twice over. Higher prices squeeze the money left over each month, and stubborn inflation makes the Bank of England more cautious about cutting interest rates.
The cost of borrowing: base rate, gilts and your mortgage
On 17 September 2026, the Bank of England held Bank Rate at 3.75%, citing volatile energy prices and the risk of inflation rising further. The next decision is due on 5 November.
Just as important are gilts, the bonds the government sells to borrow money. The yield investors demand on long-dated 30-year gilts is a barometer of confidence in the UK’s public finances and the long-term inflation outlook, and in recent times it has sat at levels not seen for decades. That matters because lenders price fixed-rate mortgages off swap rates, which move closely with gilt yields. When yields rise, fixed rates tend to follow, sometimes within days, even if Bank Rate hasn’t moved. It’s why every major speech and fiscal announcement is watched so closely by the markets.
The good news is that, after spiking in March and April, mortgage rates have since edged lower. According to Moneyfacts, the average two-year fix for those moving home stands at 4.48% APRC and the average five-year fix at 4.62%, with remortgage rates slightly higher at 4.94% and 4.83% respectively. With close to 14,000 products on the market, there is plenty of choice, which makes expert advice more valuable than ever.
Help for first-time buyers
Getting on the ladder remains tough, but there is more support available than many people realise. The government’s Freedom to Buy mortgage guarantee scheme supports 95% mortgages, so buyers can purchase with a 5% deposit. First-time buyers in England also pay no stamp duty on the first £300,000 of a purchase, on properties costing up to £500,000.
The Lifetime ISA lets savers aged 18 to 39 put away up to £4,000 a year and receive a 25% government bonus towards a first home worth up to £450,000, while shared ownership and First Homes can reduce the deposit and mortgage needed. Changes to regulatory guidance in 2025 also gave lenders more room to lend at higher income multiples. Scheme rules can change, particularly around a Budget, so check what suits your circumstances before you start house-hunting.
What should homeowners with a mortgage do now?
If your fixed or tracker rate ends within the next six months, now is the time to act, as many lenders let you secure a new rate up to six months in advance. Try to avoid drifting onto your lender’s standard variable rate, which is typically much higher than a fixed deal and can cost hundreds of pounds even over a few months.
Compare a product transfer with your existing lender against a full remortgage, as staying put isn’t always the best value. Then consider how long to fix for: a two-year fix offers flexibility if rates fall, while a five-year fix provides certainty while inflation remains unpredictable. It’s also a good moment to review your budget and your protection, and if you are finding things difficult, speak to your lender early, as getting in touch sooner gives you more options.
How to get on the property ladder
If you’re hoping to buy your first home, start by getting your credit file in shape: check your reports, make sure you’re on the electoral roll and keep up with existing payments. Then focus on your deposit. Even with 95% mortgages available, a bigger deposit usually unlocks lower rates, and remember to budget for legal fees, surveys, moving costs and any stamp duty too.
An Agreement in Principle shows sellers you’re serious and gives you a realistic idea of how much you can borrow. Finally, speak to a whole of market adviser. Lenders treat income, self-employment and credit history very differently, and a broker can point you towards those most likely to say yes.
Final thoughts: how Grange Mortgages can help
With inflation ticking up, Bank Rate on hold and gilt markets sensitive to every announcement, the mortgage market is likely to stay changeable for some time. Whether you’re approaching the end of a fixed rate, looking to move or taking your first steps onto the ladder, Grange Mortgages is here to help. Based in Northampton, we offer whole of market mortgage advice and financial protection. Get in touch today for a friendly, no-obligation chat.
Your home may be repossessed if you do not keep up repayments on your mortgage.
This article is for general information only and does not constitute financial advice. Figures were correct at the time of writing and may change.