Certainty over borrowing costs is becoming increasingly valuable to property investors and developers as rising swap rates add to the risks surrounding specialist property finance.
Octane Capital, the specialist lender, said 85% of offers issued since it introduced fixed-rate products in July have been on a fixed-rate basis, suggesting borrowers are increasingly willing to lock in financing costs rather than gamble on the direction of interest rates.
The shift comes as underlying swap rates have remained elevated and moved higher during 2026.
Octaneโs analysis shows that the average one-year swap rate has reached 4.25% so far this year, compared with 4.15% during the equivalent period in 2025 โ an increase of 0.095 percentage points.
The move has been more pronounced at the five-year end of the market. The average five-year swap rate has risen to 4.38% this year, from 4.10% over the equivalent period in 2025, an increase of 0.28 percentage points.
Swap rates have also risen since Octane launched its fixed-rate offering.
The average one-year swap rate increased from 4.33% in the period immediately before the introduction of fixed rates to 4.49% since, a rise of 0.17 percentage points.
Over the same periods, the average five-year swap rate climbed from 4.45% to 4.74%, an increase of 0.29 percentage points.
For property investors and developers, the movements highlight the difficulty of forecasting the eventual cost of finance over the life of a project.
Specialist property transactions can involve multiple sources of uncertainty, including construction and refurbishment costs, project delays, sales values and the availability of refinancing when a development reaches completion.
A fixed borrowing rate removes one of those variables, allowing investors to establish financing costs at the outset rather than leaving them exposed to further movements in the underlying market.
Jonathan Samuels, chief executive of Octane Capital, said the response to the lenderโs fixed-rate products had been โpretty emphaticโ.
โWhen we introduced fixed rates in July, we did so because we felt borrowers were placing an increasing value on certainty and the response has been pretty emphatic, with 85% of our offers since then going out on a fixed-rate basis,โ he said.
โThat preference is understandable given the persistent uncertainty surrounding the wider rate environment and the continued upward movement we’ve seen in swap rates.โ
Samuels said investors were already managing a range of variables across property projects, meaning changes in financing costs could add another layer of uncertainty.
โProperty investors and developers already have a number of moving parts to manage, from build costs and project timelines to sales and refinancing exits, and movements in the underlying cost of finance simply add another layer of uncertainty,โ he said.
โA fixed rate removes one of those variables. It’s not about trying to second guess where rates will go next, but giving borrowers certainty over their cost of finance from day one so they can plan accordingly.โ
The figures point to a broader change in the way specialist property borrowers are approaching the interest-rate environment.
Rather than betting on an imminent fall in financing costs, a large majority of Octaneโs borrowers appear to be placing greater value on predictability.
For developers operating on tight project margins, the difference can be significant. A higher borrowing cost can feed directly into development economics, while an unexpected increase during construction can alter the viability of an investment or complicate an eventual refinancing.
The continued rise in swap rates therefore leaves borrowers facing a trade-off between the potential benefit of waiting for cheaper finance and the value of knowing exactly what their borrowing costs will be.
Octaneโs 85% fixed-rate uptake suggests that, for many property investors, certainty is increasingly winning that calculation.
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