New client sentiment report shows borrowers filtered global events through personal finances, not headlines
UK mortgage borrowers largely ignored the geopolitical and macroeconomic forces driving interest rate decisions in the second quarter of 2026, according to a new sentiment index published by mortgage broker Heron Financial.
The firm's Mortgage Client Sentiment Index, built from analysis of 5,892 mortgage-relevant client conversations recorded between April and June, found that global conflict appeared in just 0.9% of conversations and inflation in 1% — despite both being central to Bank of England rate deliberations during the period.
The report describes the divergence as a gap between what was moving the market and what was moving borrowers. An energy shock was identified as the dominant factor shaping rate decisions through the quarter, yet it went largely unacknowledged in client conversations.
Instead, borrowers focused on employment stability, self-employed income, maternity pay, bonuses and second jobs. Employment and income confidence was the most frequently cited real-world theme of the quarter, appearing in 15.8% of conversations, and the fastest growing across the three months. Rate outlook and Bank of England expectations followed at 13.8%.
"Borrowers were not processing the macro picture as a macro picture," said Francel Bangayan (pictured right), marketing manager at Heron Financial. "They were processing it as their own income, their own deposit and their own completion date."
The report notes that the rate outlook came up roughly 15 times more often than the global conflict shaping it, with inflation — the mechanism connecting the two — barely registering either.
Family and life events appeared in 8.4% of conversations, politics and tax in 6.6%, and economy and market uncertainty in 4.3%, declining as the quarter progressed. Weather and seasonal small talk registered at 0.4%.
The index characterises borrower engagement with the broader economy as indirect rather than absent. Clients discussed macro conditions through the prism of personal financial decisions — whether income would support a loan, how much flexibility to retain, and what would happen if earnings changed.
"The rate outlook came up roughly 15 times more often than the global conflict shaping it," Bangayan said. "Inflation, the mechanism connecting the two, barely registered either."
The pattern held across all three months. Economy and market uncertainty was more prominent in April and eased through May and June, suggesting borrowers became less unsettled by broader conditions as the quarter progressed, even as rate uncertainty continued.
The index covered 28,621 client calls in total. After filtering for relevance, 5,892 conversations were retained for analysis. Sentiment classification was carried out using Heron Financial's integrated AI platform.
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
