Nearly one million homeowners across the United Kingdom are bracing for significant increases in their mortgage repayments this year, as a wave of five-year fixed-rate deals secured during an era of historically low interest rates reaches its conclusion.
The Scale of the Coming Repayment Shock
Data obtained from the Financial Conduct Authority (FCA) through a freedom of information request, on behalf of Compare the Market, reveals that a total of 971,105 regulated five-year fixed-rate mortgage products were taken out in 2021. This figure excludes mortgages that may have been paid off early, but analysts warn that a substantial proportion of households renewing in 2026 are likely to experience a sharp uptick in their monthly housing costs.
Many of these borrowers originally secured rates below 2%, benefiting from the ultra-low interest rate environment that prevailed at the time. However, the subsequent surge in inflation and repeated base rate increases by the Bank of England led to a dramatic rise in mortgage rates, although they have begun to ease in recent months. The Bank cut the base rate by 0.25 percentage points to 3.75% in December.
Projected Financial Impact on Households
Compare the Market has estimated that moving from a sub-2% deal to current rates could increase annual mortgage payments by as much as £2,124 for some households. This calculation is based on average 2021 house prices and assumes a buyer who put down a 25% deposit.
Data from L and C Mortgages shows that the average of the lowest five-year fixed remortgage rates across the ten largest lenders stood at 3.89% in January 2026. Borrowers who allow their mortgage to roll onto a lender’s standard variable rate (SVR) when their fixed deal ends could face even steeper increases.
Expert Advice for Navigating the Transition
Sajni Shah, a mortgage expert at Compare the Market, warned that many households "will be shocked" to witness their repayments surge. She emphasised the importance of proactive financial planning, stating: "Even small differences in rates can add up to thousands over the life of a term, so shopping around, comparing lenders and locking in a competitive rate could make a huge difference in keeping rises to a minimum."
Experts advise borrowers to consider the full cost of a new mortgage deal, including arrangement fees, rather than focusing solely on headline interest rates.
David Hollingworth, associate director at L and C Mortgages, provided context: "Homeowners that locked in a super-low rate five years ago have been sheltered from the ups and downs in interest rates in recent years. Although a hike in payments is inevitable once the fix ends, the good news is that mortgage rates have improved substantially recently and are much lower than at the peak. That will help to limit the increase, but it makes shopping around for the best deal even more vital. Starting the process several months in advance will help borrowers prepare for higher rates and enable a smooth transition to a new deal."
Broader Market Context and Support Available
It is important to note that the FCA’s data only covers regulated mortgages, which mainly include owner-occupier loans. Buy-to-let and commercial mortgages are not included, meaning the total number of households affected by these expiring deals could be even higher.
A spokesperson for UK Finance indicated that around 1.8 million households are expected to come off fixed-rate mortgage deals this year, with roughly half of those on five-year fixes. They offered reassurance and guidance: "The mortgage market is competitive with a wide range of options available, and we encourage people to shop around or speak to a broker about what is best for their circumstances. If anyone is worried about their mortgage payment, your lender is here to help. The earlier you contact your lender, the more options they will have available and the sooner they will be able to help you."
As this significant financial transition unfolds for hundreds of thousands of UK households, the consensus among industry professionals is clear: early preparation, thorough comparison, and seeking expert advice are crucial steps to mitigate the impact of rising repayments.
