If you’ve glanced at the financial news lately, you might feel like you are on a mortgage rollercoaster. After a brief period of calm, a sudden wave of spring and summer interest rate hikes has caught many UK homeowners off guard.
If you are currently on a fixed-rate deal, or if your deal is coming to an end soon, you might be feeling anxious about what comes next. Let’s strip away the confusing jargon and look at what is actually happening in the mortgage market right now, and—most importantly—what you can do to protect your household budget.
1.8 Million Deals Expiring: What to Do If Your Fixed-Rate Mortgage Ends in 2026
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According to data from the trade body UK Finance, a massive 1.8 million fixed-rate mortgages are set to end in 2026. That is a significant jump from the 1.6 million deals that ended in 2025.
If you locked in a cheap two-, three-, or five-year fixed rate back when interest rates were at historic lows, coming off your deal this year is going to feel like a financial shock.
The SVR Trap: Why Doing Nothing Costs Dearly
If your fixed deal ends and you do not set up a new plan, your lender will automatically move you onto their Standard Variable Rate (SVR). SVRs are almost always much higher than fixed or tracker rates, and lenders can raise them whenever they want. Staying on an SVR means your monthly payments could shoot up overnight.
How to Take Control
The good news is that you do not have to handle this stress alone. Navigating a remortgage is about more than just looking at the interest rates—it depends on your unique circumstances, like your property value, how much equity you have, and your income.
Working with a mortgage broker offers significant advantages, as they provide access to a vast array of deals from multiple lenders, rather than being limited to products from a single bank. Beyond simply finding competitive rates, brokers handle the often stressful and time-consuming paperwork, speak directly to lenders on your behalf, and provide tailored, regulated advice based on your unique financial situation and goals, ultimately saving you time and helping you navigate complex mortgage market conditions with confidence.
Base Rate 3.75% vs. Mortgage Rates 5.6%: Why Are UK Mortgages Going Up Again?
One of the biggest points of confusion for homeowners right now is a strange gap in the mortgage market: the Bank of England base rate is holding steady at 3.75%, yet average fixed mortgage rates have climbed to around 5.6%.
Why is this happening in the mortgage market?
If you go directly to a bank, they will only tell you about their own products. But behind the scenes, mortgage lenders do not price their fixed-rate deals based on the Bank of England‘s current rate. Instead, they use something called swap rates—which are wholesale interest rates based on what financial markets expect to happen to inflation in the future.
The Global Energy Connection
Earlier this year, conflict in the Middle East disrupted major shipping routes, causing oil and gas prices to spike. Because energy is now more expensive, the Bank of England expects inflation to stay higher for longer, meaning they probably won’t cut the base rate as quickly as we hoped.
To protect themselves, high-street banks and other lenders in the mortgage market quickly pulled their cheapest deals and repriced their fixed rates upward.
- The average two-year fixed rate climbed from 4.83% in March to around 5.66%.
- The average five-year fixed rate rose to around 5.62%.
This squeeze has also caused average UK house prices to dip slightly (down 0.1% in May to £298,806, according to Halifax). While this makes it a stronger “buyers’ market” with plenty of houses to choose from, borrowing the money to buy them has simply become more expensive.
The Remortgage Dilemma: Should You Lock in a 2-Year or 5-Year Fix Right Now?
If you are remortgaging today, you are likely debating a classic question: Do I lock in a shorter 2-year deal, or commit to a longer 5-year fix?
There is no “perfect” answer, but breaking down the pros and cons makes the decision much easier:
Mortgage Option | Pros | Cons |
2-Year Fixed Rate | Flexibility: If inflation drops and rates fall in late 2026 or 2027, you can switch to a cheaper deal sooner. | Risk & Cost: If rates go up, you will face higher payments in just 24 months. Plus, you have to pay mortgage setup fees more frequently. |
5-Year Fixed Rate | Certainty: You know exactly what your monthly payment will be until 2031, which is great for tight budgets. You also pay setup fees less often. | Locked In: If mortgage market interest rates drop sharply over the next few years, you cannot switch without paying heavy early exit fees. |
Looking at the Whole Picture: Protecting Your Home
Securing a great rate is only half the battle. A mortgage is the largest debt most of us will ever take on, so it is vital to make sure your family is protected if the unexpected happens.
Liddle Perrett’s safety specialist, Jade Topliss, works alongside their mortgage brokers to design customized safety nets for families. This means combining your new mortgage deal with essential protection policies like life insurance, income protection, or critical illness cover. If you were to fall ill or lose your income, these policies ensure your mortgage payments are looked after.
Remember: Your home may be repossessed if you do not keep up repayments on your mortgage.
Your 2026 Remortgaging Action Plan
If your mortgage deal is ending soon, here is how you can prepare:
- Start 6 Months Early: Many lenders let you secure a new rate up to six months before your current deal ends. You can lock in a rate now as an insurance policy, and if interest rates happen to drop before your switch date, you can often move to the cheaper deal.
- Calculate the True Cost: Don’t just look at the lowest interest rate. A slightly higher rate with no broker or arrangement fees might actually be cheaper overall than a low rate with a £1,500 setup fee.
- Use a Whole-of-Market Broker: High-street banks can only sell you their own products. A mortgage broker can search across hundreds of deals, including exclusive options from specialist lenders that are not available to the public.
If you want to explore your options and find a deal that fits your life and your budget, get in touch with the friendly team at Liddle Perrett today for personal, tailored advice.
Disclaimer
This article is for informational purposes only and does not constitute formal financial advice. Mortgage and protection products are highly sensitive financial agreements, and we strongly recommend seeking advice from a qualified mortgage adviser before committing to any new lending or insurance products.
The guidance and advice contained within this website and blog is subject to the UK regulatory regime and is therefore restricted to consumers based in the UK.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.