I'm a first-time buyer but am worried about rising interest rates: Should I wait another year to buy?

I am looking to buy my first home, but am increasingly concerned about higher mortgage rates. Inflation is going up and now the Bank of England has increased interest rates, I am worried mortgages will get even more expensive.I have saved a small deposit, but I'm wondering if it would be better for me to try and get on the property ladder late next year instead.Supposing mortgage rates fell in that time, it could save me a lot of money in the first few years of owning my home. If they didn't, I'd still be in a similar position to where I am now. Is waiting to buy the most sensible option? Nervous: A first-time buyer is concerned about higher interest rates on mortgages Jane Denton, of This is Money, replies: Property prices remain high compared to wages, meaning many buyers have to take out big mortgages to get on or move up the housing ladder. This means getting the best mortgage rate you can is crucial. Even a small drop in rates can save a borrower hundreds or even thousands of pounds each year. Take someone buying the average £273,000 home with a 10 per cent deposit of £27,300. They would be borrowing £245,700 and we will use the example of a 30-year repayment term. At a rate of 6 per cent, today's average two-year fix, they would pay £1,473 per month. But if rates fell to 5 per cent, they'd pay £1,319, a monthly saving of £154 or £1,848 over a year. Supposing they took a five-year fixed mortgage term, the total saving would be £9,240.However, there's no guarantee rates will by this time next year - or by how much. And while mortgage rates are getting more expensive, house price growth in some areas has ground to a halt – or even fallen slightly. The latest official figures from the Office for National Statistics show the average cost of a home was £273,000 in August 2026, having risen by 0.9 per cent in the previous 12 months.This gives first-time buyers' savings time to catch up with the cost of the properties they might want to buy, and there is also less competition meaning they can negotiate prices down. If you want to buy a flat, you could stand to make a big saving compared to what you would have paid a couple of years ago as that market is struggling. If you can pay less for a property in the first place, this also makes your mortgage payments cheaper. What has happened to mortgage deals? Earlier this month, the average interest rate on a new five-year fixed mortgage deal hit six per cent for the first time in three years, according to data from financial information service Moneyfacts. Roughly 1,500 mortgage deals priced below five per cent have vanished since the start of September.The cost of home loans has been rising as lenders face higher costs amid international concern over rising prices, interest rates, and government borrowing costs. Concern over war in the Middle East has also been feeding into mortgage rates. Recent data from Moneyfacts showed that the lowest interest rate for a two-year fixed mortgage deal was with First Direct, at 5.04 per cent. To get this rate, buyers need a deposit of 40 per cent of the purchase price, with the remaining 60 per cent coming via a mortgage. For a first-time buyer, having such a large deposit is unlikely. By contrast, a year ago, the best interest rate for a two-year fixed rate mortgage deal had an interest rate of 3.8 per cent, Moneyfacts said. Recently, a first-time buyer with a 5 per cent deposit could get a mortgage with an interest rate of 5.71 per cent via Barclays. A year ago the best deal for first-time buyers with a small deposit was with HSBC, and offered a two-year fix with an interest rate of 4.79 per cent. The Bank of England increased interest rates to 4 per cent when it met on Thursday this week, putting further pressure on borrowers and prospective first-time buyers. But is it worth shelving your plans for a year? I asked two experts for their views on your question. Mark Harris, chief executive of SPF Private Clients, said: Whether you buy now or wait will depend on several factors, not least whether you have found something you wish to buy and can afford to do so, as well as what you think might happen with mortgage rates.If you do decide to hold off and are looking for a way to get a cheaper mortgage rate, it might be worth looking at the government’s Your First Home scheme. This was announced in last week's Budget and is aimed at those with limited deposits and no help from the Bank of Mum and Dad. Applications are set to open in February 2027 and it might be an option if you are buying in England and interested in a new-build flat or house. Borrowers will be offered a government-backed equity loan worth 20 per cent of the purchase price and will need at least a 2.5 per cent deposit.Putting these together, someone making the minimum 2.5 per cent contribution could put down a deposit of 22.5 per cent. This would get them access to cheaper mortgage rates than if they had, say, a 10 per cent deposit. Interest starts being charged on the loan after five years, or when the property is sold. The ongoing conflict in the Middle East has fuelled inflation, which in turn is increasing market expectations of interest rate rises and higher mortgage costs. The markets are pricing in around three more quarter-point increases in base rate by the end of next year, whereas economists predict anything from no change to two or three increases. There seems to be a consensus around one more base rate rise before falling back later in 2027 and after that.The thing is nobody really knows whether mortgage rates will be cheaper next year or not, so do what suits you. If you can afford to buy now and have found something you wish to purchase, it might make sense to press on, particularly if you are renting and have that outgoing to consider. Current climate: Parts of the UK property market are sluggish, posing opportunities for buyersJonathan Harris, managing director of Forensic Property Finance, said: If you are keen to buy your first home, I would do it now rather than delay. It is impossible to predict the likely trajectory of interest rates in the future but at least you know what you are dealing with at the present time.If you buy now, you might want to opt for a fixed rate, as many first-time buyers do.This will help you budget as you will know exactly what your monthly payments will be, no matter what happens with interest rates and mortgage pricing.While base-rate trackers are priced cheaper at least initially, there is more of a risk with opting for these as if base rate does rise, so do your mortgage payments. A variable-rate should only really be considered by those who could absorb any increases in base rate. In terms of which fix to go for, you might wish to consider a two-year fix rather than a longer-term fixed option. This would be a balanced approach as it would allow you to benefit from security in the short term, but not lock you in for too long so you can remortgage in a couple of years, when hopefully rates will have come down.The property market is pretty stagnant at present, with Lloyds reporting prices unchanged in September following a 0.3 per cent fall in August, which would indicate that it is in your favour as a buyer. It may therefore be a good time to pick up a property for a sensible price, particularly if it is a flat, as there is less demand for these.How to find a new mortgage Mortgage rates have jumped as conflict with Iran has driven up inflation expectations and dashed hopes of interest rate cuts.If you need a mortgage because you are buying a home, or your current fixed rate deal is due to end, you should explore your options as soon as possible. This is Money has a long-standing partnership with fee-free broker L&C, to provide you with expert mortgage advice.Use This is Money and L&Cs best mortgage rates calculator to show deals matching your home value, mortgage size, term and fixed rate needs.Or use L&C’s online Mortgage Finder to search thousands of deals from more than 90 different lenders to discover the best deal for you.Mortgage service provided by London & Country Mortgages (L&C), which is authorised and regulated by the Financial Conduct Authority (registered number: 143002). The FCA does not regulate most Buy to Let mortgages. Your home or property may be repossessed if you do not keep up repayments on your mortgage