A million homeowners face sharp mortgage rises in 2026 – why and how to prepare

Around 1.8 million mortgage holders will reach the end of their fixed-rate period in 2026, and of these, nearly 1 million will remortgage for the first time since mortgage rates spiked in September 2022. These expiring deals were likely secured at ultra-low interest rates available in 2021, which have since disappeared. While mortgage rates have eased from their recent peaks, they remain high enough that many households coming off five-year fixed deals will face a significant jump in monthly costs. Conversely, those coming off two-year fixed deals may actually see their payments fall.

What is ahead for mortgage deals expiring in 2026

About half of the mortgage deals set to expire in 2026 are reaching the end of a five-year fixed period. According to information released by the Financial Conduct Authority, in response to a freedom of information request from Compare The Market, the total number of mortgages facing a substantial interest rate hike is 971,105. This does not account for those who may have repaid their mortgage in full during the last five years. It is this group of mortgage holders who will face a significant increase to their current mortgage payments.

Remortgaging in 2026 from a five-year fixed deal

Five years ago, the market was a different world. It had yet to face the 2022 mini-budget "shock," post-Covid inflation, or the energy price hikes following the invasion of Ukraine. In response to these factors, the Bank of England raised the base rate and lenders increased their mortgage rates accordingly.

The average mortgage interest rate available on a 5-year fixed deal is currently 4.94% (according to Moneyfacts UK) although it is possible to secure a rate as low as 3.75%. You will find regularly updated remortgage deals in our article, "Best remortgage deals in the UK". Compare this to the average interest rate in 2021 of around 2.30%, and the impact of remortgaging in 2026 will result in a rate increase of 1.4%-2.6%. For a £200,000 mortgage with 25 years remaining, this could add £1,800 or more to the total annual mortgage payments. The exact amount of any increase will, of course, depend on the rate you secured five years ago and the best rate that you can secure this year, based on your personal financial circumstances.

However, doing nothing is worse as rolling onto a lender’s Standard Variable Rate (SVR), currently averaging around 7.50%, would cause an even sharper payment spike.

Remortgaging in 2026 from a two-year fixed deal

Fixed-term mortgage rates in 2023 rose over 5.50% depending on your mortgage loan-to-value (LTV). As current mortgage rates are lower than the 2023 peaks, borrowers coming off two-year fixed mortgage deals could see their monthly outgoings reduce. However, it is important to shop around for the best mortgage rates in order to maximise any savings.

How to prepare if your mortgage deal is expiring in 2026

To avoid rolling onto your lender’s SVR when your current mortgage deal expires, you will need to take out a new deal with your current lender (a product transfer) or remortgage with a new lender. Lenders usually write to customers to make them aware of when their current mortgage deal will expire, and may include the new rates you can secure. While the process of arranging a product transfer with your existing mortgage lender may seem easier than shopping around in the open market, you could stand to miss better deals available elsewhere. You can read more about how to choose between staying with your current lender and shopping around in our article, "What is a product transfer mortgage and is it better than a remortgage?".

It is also worth considering your home's current value and outstanding mortgage balance when reviewing your options. If the value of your home has increased and/or your mortgage balance has reduced, you may be able to negotiate a better mortgage deal based on a lower loan-to-value.

Start by reviewing the details of your existing mortgage and confirming the exact expiry date. If you choose to stick with your current lender, many lenders will allow you to secure a new mortgage rate up to 6 months in advance of your mortgage deal's end date - something known as the product transfer window. We list many lenders' product transfer windows in our article, "Mortgage product transfer window - when to speak to your lender". You can secure an interest rate without being locked in, and if a better rate comes up before your remortgaging date, you can simply switch to the better deal. This provides you with some protection against rising mortgage rates while allowing you to take advantage of better rates if they appear before your current fixed-deal period ends.

On the other hand, should you wish to secure the best mortgage rate possible, you will need to search the market. You can use our mortgage rate comparison tool to gauge which mortgage deals are available for your specific mortgage needs but bear in mind that you may not qualify for all that are listed. For this reason, it is wise to engage the services of a mortgage broker who can access remortgage deals across the mortgage market taking into consideration which deals you are likely to be accepted for. If you do not have a mortgage broker, you can source one using the online directory of financial professionals, Vouchedfor* - it allows you to search for mortgage brokers in your area and you can select on the basis of their expertise and the customer reviews they have received. If you would prefer to engage with a mortgage broking service online and over the telephone, you can do so free of charge with Habito* - an online mortgage broker service that will search over 90 lenders' deals for you and provide guidance to help you remortgage successfully.

 

If a link has an * beside it this means that it is an affiliated link. If you go via the link, Money to the Masses may receive a small fee which helps keep Money to the Masses free to use. The following link can be used if you do not wish to help Money to the Masses or take advantage of any exclusive offers - Habito, Vouchedfor