When mortgage rates are high, waiting for them to fall before investing may seem like the right thing to do, but is it?
According to Rightmove, the average two-year fixed mortgage rate was around 5% in early September 2026. So it’s easy to see why property investors may be hesitant to buy now. Bear in mind that buy-to-let mortgage rates can differ from those available to homebuyers.
What goes up must eventually come down, right? So, should you wait it out? And will waiting for rates to fall really deliver the savings you expect?
Mortgage rates are difficult to predict, and waiting comes with its own risks. In this article, we’ll explain what could happen if you wait for mortgage rates to fall and how to decide whether it makes more sense to buy now or sit tight.
Why Are Mortgage Rates So Difficult to Predict?
It is very difficult to predict whether mortgage rates are going to rise or fall because they are influenced by more factors than just the Bank of England base rate.
When pricing fixed-rate mortgages, lenders also look at swap rates, which are rates used in financial contracts that exchange fixed and variable interest payments. These rates reflect market expectations about future interest rates and can change quickly.
This means that if Bank Rate is expected to fall soon, the anticipated change may already be reflected in current mortgage rates. So, you may find that when the Bank of England cuts its rate, mortgage rates don’t actually fall as much as you expected.
For this reason, it’s very difficult to time an investment ‘perfectly’. Rather than waiting for mortgage rates to fall, in some instances, it can be more useful to run the figures and see if the investment stacks up at the costs available today.
What Are the Risks of Waiting for Mortgage Rates to Fall?
Although you may feel like you’re being careful by biding your time and not rushing into an investment, waiting can also pose a risk, particularly when there’s no guarantee that rates will fall.
Some of the potential risks to consider include:
Property Prices Could Rise as Buyer Demand Increases
Buyer demand tends to increase when mortgage rates drop. If housing supply is low, when demand increases, it can push property prices up. So, if you wait, your mortgage rate may be lower, but some of those savings could end up being offset by a higher purchase price.
If mortgage rates fall after you’ve bought, you may have the opportunity to refinance to a better mortgage deal in the future, but you can’t go back and buy the property at yesterday’s price.
Competition for Investment Properties Could Increase
If everyone is waiting for mortgage rates to fall, when they eventually do, it can cause a wave of buyer interest, making competition for each property much tougher.
Mortgage Rates Could Stay Higher for Longer
There’s no guarantee that mortgage rates will fall when you expect them to. Economic conditions can change quickly, so rates could end up staying high for longer than you anticipated, or even continue to rise while you’re waiting.
You Could Miss a Good Investment Opportunity
The property market won’t stand still while you’re waiting for rates to fall. If you’ve found a property you like, delaying the purchase in the hope of securing a cheaper mortgage could mean missing out on the opportunity altogether.
Why You Should Compare More Than Mortgage Interest Rates
It’s easy to get drawn in by the headline interest rate when comparing mortgages, but don’t forget that a low rate doesn’t necessarily mean a good deal.
Mortgages often come with additional costs, including arrangement fees and valuation fees, which means a deal with a lower interest rate won’t necessarily be the cheapest option overall.
The mortgage rates and products available to you will also depend on your individual circumstances and the property you’re buying.
The rate available to you depends on factors like:
- Your loan-to-value (LTV) ratio.
- The size of the deposit you’re putting down.
- Your income.
- Your credit history.
- The type of property you’re buying.
- The type and length of mortgage deal you choose.
So, whether you’re thinking about buying now or waiting for rates to fall, make sure you carefully weigh up the overall cost of borrowing before investing, rather than opting for the mortgage with the lowest headline rate. Understanding how your borrowing costs affect your overall returns is an important part of building a profitable property portfolio.
When Might It Make Sense to Wait Before Buying an Investment Property?
Of course, there’s no point rushing headlong into an investment unless you’re confident it’s going to provide good returns. If the numbers don’t stack up, you’re not ready, or you haven’t found the right property yet, then waiting may still be the most sensible move.
Here are a few situations where waiting could make the most sense:
The Investment Doesn't Stack Up at Current Mortgage Rates
If you run the numbers and higher borrowing costs leave you with very little cash flow or make the potential returns poor, then there’s little point rushing into an investment while rates are high.
Waiting Could Help You Build a Larger Deposit
Waiting could also give you more time to build up a larger deposit and reduce your loan-to-value (LTV) ratio. A larger deposit could give you access to a wider range of mortgage products and more competitive rates.
You Don't Have Enough of a Financial Buffer
Don’t stretch your finances too far. If you haven’t yet built up a good financial buffer, investing in a property with high mortgage payments could leave you with little room to absorb unexpected costs. It may make more sense to spend time strengthening your financial position while rates are still high.
You Haven't Found the Right Investment Property
Don’t invest just for the sake of it. Make sure you only invest when you’re sure you’ve found the right property, one that meets your investment criteria and will generate a good return at today’s costs.
How to Decide Whether to Buy an Investment Property Now or Wait
So, you’ve found a property that meets all your investment criteria, but mortgage rates seem high. What should you do?
It’s hard to predict what mortgage rates might do next, so it’s best to take the guesswork out of your decision and run the numbers for both the best-case and worst-case scenarios. Then, you can make an informed decision about whether the property still looks like a good investment on paper.
If the property only looks like a good investment when you assume mortgage rates will fall, it might not be the right deal for you right now.
Step 1: Run the Numbers at Today's Mortgage Rate
Start by calculating the return and cash flow the property could generate under a mortgage rate realistically available to you today.
Step 2: Stress-Test the Deal at a Higher Rate
Now, imagine mortgage rates go up, not down, after your initial deal ends. Would the property still generate acceptable returns?
Step 3: Model a Lower-Rate Scenario
Next, run the figures again but using a lower mortgage rate to see how the numbers would compare if rates fell. Comparing the three different scenarios side by side will give you a much better idea of how sensitive the investment is to changing mortgage rates.
Step 4: Consider Fixed vs Variable Mortgage Rates
Finally, think about how the type of mortgage you choose could affect both your borrowing costs and the level of certainty you have over them. A fixed-rate mortgage gives you greater certainty over repayments for a set period, while a variable or tracker mortgage could allow you to benefit from falling rates sooner (but would also leave you more exposed if rates rise).
Step 5: Don't Rely on Future Refinancing
When you make your decision, don’t rely on the assumption that you’ll refinance to a cheaper mortgage in the future. There’s no guarantee that rates will fall or that the rates or products you’re interested in will be available when they do fall.
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