Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Solutions. Read the original article for full details.

First-Time Buyers Turn to Tracker and Variable Mortgages Amid Rising Rates

Nearly a third of first-time buyers considered tracker or variable rate mortgages in July 2026 as fixed rates remained high, according to analysis by Moneyfacts. The share of first-time buyers researching these products rose to 31.3% in July, up from 9.5% in February.

Moneyfacts data showed that interest in tracker and variable mortgages among first-time buyers averaged less than 10% of search activity during the spring, before mortgage rates began to climb. The increase in interest coincided with a rise in the average two-year fixed mortgage rate for a 90% loan-to-value (LTV) deal, which increased by 65 basis points to 5.74% between February and July 2026.

For a typical first-time buyer borrowing £200,000 over 25 years, this rate rise meant monthly repayments increased from around £1,180 to £1,257. Even though rates started to ease in April, first-time buyers still faced an annual payment increase of about £924 compared to February.

In comparison, the average two-year tracker rate at 90% LTV was 4.8% in July, resulting in monthly repayments of around £1,146 on the same loan. This represented a saving of approximately £111 per month, or more than £1,300 per year, compared to an equivalent fixed rate deal.

Adam French, head of consumer finance at Moneyfactscompare.co.uk, noted that the jump in first-time buyers researching tracker mortgages reflected the pressure higher rates were putting on budgets. He also highlighted that while tracker mortgages may offer lower initial costs, monthly payments are not guaranteed to remain the same, and borrowers should ensure they can afford potential increases.

For letting agents and inventory clerks, these trends may signal changes in the types of mortgage products favoured by new entrants to the property market, potentially affecting demand and affordability in the rental and sales sectors.