Mortgage prices ‘shock’ for nearly a million as fixed-rate deal ends

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Your help makes all of the distinction. Learn extra Practically a million householders face a major monetary adjustment in 2026 as their five-year fixed-rate mortgages, doubtless secured at ultra-low charges, are due for renewal.

In keeping with knowledge from the Monetary Conduct Authority (FCA), obtained by comparability web site Examine the Market by way of a freedom of knowledge request, 971,105 such merchandise had been opened in 2021. This determine highlights a possible shock for a lot of households.

The whole doesn't account for mortgages paid off early.

In 2021, sub-2% five-year charges had been broadly obtainable within the low rate of interest setting. Mortgage charges later jumped, however have been edging down extra not too long ago, with the Financial institution of England slicing the bottom charge by 0.25 share factors to three.75% in December.

In keeping with knowledge from L&C Mortgages, the typical of the bottom remortgage five-year fastened charges throughout the ten greatest mortgage lenders was 3.89% in January 2026.

<img src="https://static.independent.co.uk/2026/01/26/00/66e6dfc6bedb524fce2d5de6c78c3b49Y29udGVudHNlYXJjaGFwaSwxNzY5MjY3ODUy-2.38488394.jpg" srcset="https://static.independent.co.uk/2026/01/26/00/66e6dfc6bedb524fce2d5de6c78c3b49Y29udGVudHNlYXJjaGFwaSwxNzY5MjY3ODUy-2.38488394.jpg?quality=75&width=320&auto=webp 320w, https://static.independent.co.uk/2026/01/26/00/66e6dfc6bedb524fce2d5de6c78c3b49Y29udGVudHNlYXJjaGFwaSwxNzY5MjY3ODUy-2.38488394.jpg?quality=75&width=640&auto=webp 640w" loading="lazy" alt="Borrowers letting their five-year mortgage roll onto a standard variable rate this year could see particularly big cost jumps (Joe Giddens/PA)" class="sc-1mc30lb-0 ggpMaE inline-gallery-btn"/> open picture in gallery

Debtors letting their five-year mortgage roll onto a normal variable charge this 12 months may see notably huge value jumps (Joe Giddens/PA) (PA Archive) Calculations by Examine the Market point out that extra pricey charges may doubtlessly push up some households’ annual mortgage funds by as a lot as £2,124, primarily based on common home costs in 2021 and somebody having had a 25% deposit in 2021.

Debtors letting their five-year mortgage roll onto a normal variable charge (SVR), which occurs when preliminary mortgage offers finish, may see larger value jumps.

Sajni Shah, a mortgage knowledgeable at Examine the Market, stated many households “will probably be shocked” to see their repayments bounce, including that when householders are trying out their remortgage choices “even small variations in charges can add as much as 1000's over the lifetime of a time period, so procuring round, evaluating lenders and locking in a aggressive charge may make an enormous distinction in maintaining rises to a minimal”.

Debtors might want to issue within the total value of the mortgage, together with charges, in addition to the speed.

David Hollingworth, affiliate director at L&C Mortgages, stated: “Householders that locked in a super-low charge 5 years in the past have been sheltered from the ups and downs in rates of interest in recent times.

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“Though a hike in funds is inevitable as soon as the repair ends, the excellent news is that mortgage charges have improved considerably not too long ago and are a lot decrease than on the peak.

“That may assist to restrict the rise, however it makes procuring round for the perfect deal much more very important. Beginning the method a number of months prematurely will assist debtors put together for increased charges and allow a easy transition to a brand new deal.”

The FCA’s product gross sales knowledge covers regulated mortgages solely, usually comprising owner-occupier mortgages.

Purchase-to-let and business mortgages are unregulated merchandise, for which the FCA doesn't gather equal knowledge.

A spokesperson for UK Finance stated: “Round 1.8 million households are attributable to come off fastened charge offers this 12 months, and we count on round half of those to be five-year fixes.

“The mortgage market is aggressive with a variety of choices obtainable, and we encourage folks to buy round or communicate to a dealer about what's greatest for his or her circumstances.

“If anybody is apprehensive about their mortgage fee your lender is right here to assist. The sooner you contact your lender, the extra choices they are going to have obtainable and the earlier they are going to be in a position that will help you.”