Autumn Budget 2026: What It Means for Your Mortgage

Introduction: The Budget Has Landed

On 28 October 2026, Chancellor John Healey delivered his first Autumn Budget. Billed as a Budget for "breathing space", it focused on everyday costs, energy bills and getting more people onto the housing ladder, while raising more from savings and rental income.

For anyone buying, remortgaging or holding property, the headline news is mixed but reasonably clear. First-time buyers get a new route onto the ladder, landlords face a higher tax take from April 2027, and stamp duty has been left alone.

Here is what was actually announced, and what it means for your own plans.

Helping First-Time Buyers: The Your First Home Scheme

The centrepiece for the housing market is Your First Home, a government-backed equity loan scheme for first-time buyers in England.

• How it is structured: a 2.5% deposit from the buyer, a 20% equity loan from the government, and a mortgage covering the remaining 77.5% of the purchase price.
• New build only: the scheme is aimed at new-build homes, with participating builders involved in delivering it.
• Lower monthly cost: because the mortgage is based on 77.5% rather than 95% of the property value, the government estimates borrowers could save hundreds of pounds a month compared with a high loan-to-value mortgage.
• Scale: the government says the scheme will help around 70,000 people onto the property ladder.

A simple example makes the difference clear. On a £240,000 new-build home, a 2.5% deposit is £6,000. The government equity loan covers £48,000, and the mortgage is £186,000. Under a 95% mortgage, the same buyer would need £12,000 and borrow £228,000.

Two points are worth being honest about. The equity loan is not free money: it is a share of your home that has to be repaid, usually when you sell. And full eligibility rules, including income limits and regional price caps, sit alongside the scheme, so the detail matters as much as the headline.

A New First Time Buyer ISA

The Lifetime ISA is being replaced with a First Time Buyer ISA, intended to be simpler and less punishing for anyone whose plans change.

• Existing Lifetime ISA holders keep their accounts and can continue contributing.
• From today, the Lifetime ISA withdrawal charge falls to 20%, so buyers purchasing above the existing £450,000 property price cap are no longer penalised as heavily.
• The planned cut to the cash ISA allowance has been scrapped. The annual ISA allowance stays at £20,000, and all of it can still be held in cash.

For a first-time buyer saving a deposit in Colchester or across Essex, that last point matters. Cash savings remain a sensible home for money you need in the next two to three years.

Landlords: Higher Tax on Rental Profit from April 2027

This is the change most likely to affect existing property investors, and it is already legislated.

• From 6 April 2027, rental profits in England, Wales and Northern Ireland move to their own Income Tax rates: 22% at the basic rate, 42% at the higher rate and 47% at the additional rate.
• Relief for residential mortgage interest and other finance costs will be given at the 22% property basic rate.

In practice, a landlord with £12,000 of rental profit taxed at the higher rate would see tax rise from £4,800 to £5,040, around £240 a year more. Those with larger portfolios, or with substantial mortgage interest, will feel it more.

None of this is a reason to panic, but it is a reason to plan. Review your yields, stress test your numbers against the 2027 rates, and factor the new rates into any purchase you are considering now.

What the Budget Did Not Change

Plenty of pre-Budget speculation came to nothing, which is often the most useful news of all.

• Stamp duty: unchanged, with current rates and first-time buyer relief continuing.
• Income tax, National Insurance and VAT: headline rates untouched.
• Capital gains tax: rates stay at 18% and 24%, with the annual exempt amount at £3,000.
• Income tax thresholds: frozen until April 2031, so fiscal drag continues.

What This Means for Your Mortgage

The Budget sets the fiscal backdrop, but mortgage pricing is driven more by swap rates and lender appetite than by any single announcement.

• Remortgaging: with the Bank of England base rate currently at 3.75%, there is no Budget-driven reason to delay a review. If your current deal ends in the next six months, start the conversation now.
• First-time buyers: Your First Home could genuinely reduce the deposit barrier, but it applies to new builds only. Compare it with a standard 90% or 95% mortgage rather than assuming it is always the cheaper route.
• Landlords: the April 2027 tax rise is confirmed. Build it into your affordability calculations before you commit to another property.
• Existing homeowners: if you are considering capital raising for home improvements, the cost of borrowing is the number that matters, not the fiscal statement.

Next Steps

If you would like to know what any of this means for your own circumstances, you can chat with Molly, our Mortgage321 AI assistant, for general guidance on where to start. For a proper conversation about your deposit, your remortgage timing or your property plans, speak to Matthew directly.

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Important Notice: The information in this article is for general guidance only and does not constitute regulated financial advice. Mortgage rules and rates change frequently. Always consult with a qualified mortgage adviser who can assess your individual circumstances and provide personalised recommendations. Your home may be repossessed if you do not keep up repayments on your mortgage.