Mortgage Costs Shock Approaching for Nearly One Million Homeowners — What You Need to Know

Many UK homeowners are heading into 2026 facing a significant mortgage cost shock as a large wave of fixed-rate mortgage deals, taken out during the ultra-low interest rate environment of 2021, reach their natural end. About 971,000 five-year fixed-rate mortgages are set to expire this year, meaning thousands of borrowers will need to remortgage or roll onto higher-cost deals, with potentially large increases in their monthly payments.

📈 Why This Matters

Back in 2021, many borrowers secured five-year fixed mortgages at historically low interest rates — often below 2%. These deals protected households through the years of rising rates and economic uncertainty. Now, with those deals expiring and current fixed rates noticeably higher, many people will see their borrowing costs increase if they aren’t prepared.

According to industry data:

• Fixed-rate deals available now are significantly higher than those secured during the pandemic years.
  
• Based on average figures, households could see mortgage costs rise by up to £2,100 per year compared with their previous payments.
  

For many, the difference between the deal they were on and the cost of a new fixed rate or an SVR (Standard Variable Rate) could mean hundreds of pounds more per month.

🏡 Key Considerations for Homeowners

If your fixed-rate mortgage is due to end this year, here are three priority actions to help manage the transition:

1. Start Planning Early
Mortgage lenders and brokers often recommend beginning remortgage conversations 3–6 months before your current deal expires. Waiting until the last minute can limit your options and leave you on your lender’s SVR, which is typically much higher than fixed rates.

2. Compare the Full Market — Not Just Your Lender
Each lender prices differently, and the difference between the cheapest deal and your current lender’s remortgage offer can be substantial. A broker can access whole-of-market deals and help find the most cost-effective solution for your deposit size, income profile and plans.

3. Understand Costs Beyond the Interest Rate
When comparing deals, always consider arrangement fees, valuation costs, and any early repayment charges with your existing lender. The true cost of a mortgage isn’t just the headline rate — it’s the total amount you’ll pay over the term.

📊 What This Means for the 2026 Market

With around 1.8 million fixed-rate deals coming to an end this year, the UK mortgage market is under pressure to meet demand — both from homeowners needing to remortgage and buyers looking for new financing.

At the same time, some recent data suggests the mortgage market may be showing signs of stabilisation, with:

• More competitive pricing across fixed-rate products;
  
• Broader choice in mortgage deals compared with recent years;
  
• Gradual movement towards lower rates as market expectations shift.
  
  Still, the key message remains the same: don’t let your deal simply roll onto a high-cost rate.

  

 🔍 How Mortgage321 Can Help

At Mortgage321, we specialise in providing tailored, proactive mortgage solutions — particularly for clients with complex needs or specialist circumstances. Whether you’re:

• Approaching the end of a fixed-rate deal;
  
• Looking to raise capital;
  
• Remortgaging with buy-to-let or portfolio objectives;
  
• Or reviewing longer-term borrowing strategies…
  
  …we can help you assess the right products and timing for your situation.

Our advisers will work with you to:

✔ Analyse the total cost of available mortgage deals
✔ Identify products that suit your financial goals
✔ Lock in competitive rates with as much lead time as possible
✔ Minimise payment shock and secure affordability

 📞 Next Steps

If your fixed deal is coming up for renewal in 2026 — or you’re unsure when it ends — now is the time to review your options.

Get in touch with our expert team today on 01255 440142 or email [email protected] for a personalised review and market-wide comparison.

We’ll help you plan ahead, reduce risk, and make confident decisions in a changing interest rate environment.