Five million homeowners face higher mortgage payments and why it pays to plan six months ahead

More than five million households are expected to face higher mortgage repayments by the end of 2028, according to the Bank of England. For homeowners approaching the end of a fixed deal, starting early could provide more time, more options and greater certainty¹.

Millions of homeowners may need to prepare for an increase in their monthly mortgage payments when their current deals end.

The Bank of England estimates that a little over five million households will see their repayments rise by the end of 2028. That is up from nearly four million in its previous forecast in December 2025¹. 

For many borrowers, the increase may be relatively modest. The Bank projects that the typical owner-occupier coming off a fixed rate during the next two years could see their monthly payment rise by around £45¹.

However, averages can conceal much larger increases for individual households.

Nearly 750,000 borrowers paying an interest rate below 3 per cent are due to reach the end of their fixed deals during 2026. The Bank expects this group to experience an average increase of around £170 a month¹. 

That would add approximately £2,040 a year to the average household’s mortgage costs.

Why are more borrowers expected to pay more?

The cost of new fixed-rate mortgages is influenced by several factors, including market interest-rate expectations and the cost of funding mortgages.

At the time of the Bank of England’s July report, the average quoted rate for a two-year fixed mortgage at 75 per cent loan to value was 4.92 per cent. This was 0.72 percentage points higher than at the time of its December report¹.

The average quoted two-year rate at 90 per cent loan to value had risen to 5.32 per cent¹. 

Mortgage pricing can change before the Bank of England makes a decision on Bank Rate. Lenders frequently adjust products in response to movements in wholesale funding markets and their expectations about future rates².

This means waiting for the next Bank of England announcement does not necessarily provide a clearer or cheaper route to a new mortgage.

Why should you speak to a broker six months before your deal ends?

Many homeowners leave their remortgage arrangements until the final few weeks of their existing deal.

Starting approximately six months in advance can give a broker time to assess the available options, identify any potential obstacles and prepare an application before the existing rate expires.

MoneyHelper recommends beginning the switching process around six months before the current deal ends³. 

This early review can be valuable for several reasons.

You may be able to secure a rate in advance

Many lenders allow eligible customers to reserve a new mortgage deal several months before their current fixed rate ends.

This can provide a degree of certainty about the rate and monthly payment that may apply when the existing deal expires.

Mortgage Charter signatories have committed to allowing customers to lock in a new deal up to six months before the end of a fixed-rate period. Where an equivalent lower-priced deal subsequently becomes available from the same lender, eligible customers may request it before the new deal starts⁴.

However, product availability and switching arrangements vary between lenders. Fees may also be payable or non-refundable in some circumstances.

When a fixed deal ends, homeowners will commonly have two broad choices.

They can select a new product from their existing lender, known as a product transfer, or remortgage to another lender³.

Staying with the current lender may involve a simpler process and could avoid a new valuation or full affordability assessment. However, it does not automatically mean that the lender’s offer will be the most suitable or cost-effective option.

Moving to another lender may provide access to a different rate, fee structure or set of features. It will usually involve a new application, affordability assessment, valuation and legal work.

A broker can compare the available alternatives, taking account of the interest rate, arrangement fees, incentives, early repayment charges and overall cost over the relevant period.

A lower rate does not always mean a cheaper mortgage

Headline rates can be misleading when considered in isolation.

A product with a lower interest rate could carry a substantial arrangement fee. Another deal with a slightly higher rate and a lower fee may cost less overall, particularly on a smaller mortgage balance.

A broker can assess the total cost of each option rather than comparing rates alone.

The review can also consider:

• whether the mortgage term remains appropriate; 

• whether the property’s value has changed; 

• whether the borrower has entered a lower loan-to-value band; 

• whether overpayments have reduced the balance; 

• whether income or employment has changed; 

• plans to move home; 

• the need for payment flexibility; and 

• any early repayment charges. 

These factors may influence which product or lender is suitable.

What happens if rates improve after you apply?

Securing an available mortgage does not necessarily mean the review process must end.

Depending on the lender, product and stage of the application, it may be possible to move to a lower-priced option before the new mortgage completes.

A broker can monitor the available position and check whether an alternative should be considered. Any change will remain subject to lender criteria, product availability and application deadlines.

There is no guarantee that rates will fall, or that a better product will become available.

Equally, waiting in the hope of a reduction carries the risk that available rates may rise.

Starting early can provide an initial option while allowing time to review the market.

Do not drift on to the standard variable rate without checking

At the end of a fixed or discounted period, a mortgage will normally move to the lender’s standard variable rate unless another arrangement has been made.

A standard variable rate is set by the lender and can be changed. It is often higher than the rates available on fixed or tracker products, although this will depend on the lender and market conditions³. 

Allowing a mortgage to move on to the standard variable rate could therefore produce an avoidable increase in payments.

There may be circumstances where remaining on a variable rate is appropriate, particularly if the borrower expects to repay or move the mortgage shortly and wants to avoid early repayment charges. It should nevertheless be an informed decision rather than the result of leaving the review too late.

What if the new payments may be unaffordable?

Homeowners who believe they may struggle with a higher payment should contact their lender as early as possible.

Possible support will depend on individual circumstances and may include temporary changes to the mortgage. Extending the mortgage term or temporarily moving to interest-only payments may reduce immediate monthly costs, but can increase the total amount repaid and may lead to higher payments later.

Under the Mortgage Charter, eligible borrowers who are up to date with their payments may be able to switch temporarily to interest-only payments for six months or extend their term without a new affordability assessment. These options are not necessarily suitable for everyone and can increase the mortgage’s overall cost⁴. 

A broker can explain the mortgage options that may be available, but customers experiencing financial difficulty should also speak directly to their lender. Free debt guidance may be appropriate where wider household debts have become unmanageable.

The broker’s view

The key message is not that every homeowner should switch lender or select a new fixed rate immediately.

It is that homeowners should give themselves sufficient time to make an informed decision.

Starting the conversation six months before a deal ends allows time to understand the likely new payment, compare the existing lender with the wider market and address any changes in income, credit history or future plans.

It may also allow an available rate to be secured while the options remain under review.

If your current mortgage deal is due to end within the next six months, contact us to arrange a review of your available options.

Your home/property may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.

There may be a fee for mortgage advice. The precise amount of the fee will depend on your circumstances.

Think carefully before securing other debts against your home/property.

The FCA does not regulate some forms of Buy to Lets.

All the information in this article is correct as of the publish date 30^th July 2026. The opinions expressed in this publication are those of the authors. The information provided in this article, including text, graphics and images does not, and is not intended to, substitute advice; instead, all information, content, and materials available in this article are for general informational purposes only. Information in this article may not constitute the most up-to-date legal or other information.

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References: 

1. Bank of England (2026). Financial Stability Report – July 2026. [online] Available at: https://www.bankofengland.co.uk/financial-stability-report/2026/july-2026  [Accessed 28 July 2026].

2. MoneyHelper. (2026). How to prepare for an interest rate change | MoneyHelper. [online] Available at: https://www.moneyhelper.org.uk/en/homes/buying-a-home/how-to-prepare-for-an-interest-rate-rise     [Accessed 28 July 2026].

3. MoneyHelper. (2026). Remortgaging to get the best deal | MoneyHelper. [online] Available at: https://www.moneyhelper.org.uk/en/homes/buying-a-home/remortgaging-to-cut-costs.html    [Accessed 28 July 2026].

4. HM Treasury (2026). Mortgage Charter. [online] GOV.UK. Available at: https://www.gov.uk/government/publications/mortgage-charter-2026/mortgage-charter [Accessed 28 July 2026].