Mortgage Timebomb: Could Your Monthly Repayments Be About to Soar?
Millions of households across the country are heading for a financial jolt as their fixed-rate mortgage deals start to come to an end. These deals were often taken out during the pandemic when interest rates were at record lows. Now, with those rates no longer available, many borrowers could see their monthly repayments rise sharply[1].
The average household switching from a fixed-rate mortgage in the coming two years is projected to see a monthly increase of £146. That may not sound much in isolation, but for households already feeling the pinch, it could be the tipping point[1].
This change will affect many borrowers between now and the end of 2026. If you are one of them, it is important to understand what is coming and to act now before the pressure begins to build.
What You Need to Do Right Now
The first step is to check when your existing mortgage deal ends. If you are within 6 to 12 months of expiry, you should speak to your mortgage adviser straight away. Getting early advice can make a big difference. There may be opportunities to secure a new deal well in advance, helping you avoid last-minute panic and potentially saving you money.
Your adviser can help you review your current rate, compare what is available on the market, and ensure your next step is the right one for your personal circumstances.
Be Prepared for Higher Monthly Payments
If you took out a mortgage during the pandemic, it is likely you have been enjoying a very low interest rate. With those deals ending, you may find your repayments increase substantially. This is particularly true if you move on to your lender’s standard variable rate without arranging a new deal.
Your mortgage adviser can help you stress-test your budget to see what future repayments might look like. This means calculating how your monthly payments could change, giving you time to adjust your finances before any increases take effect.
Is Your Income Protected?
As monthly payments rise, more households will be operating with smaller financial safety nets. That is why it is important to consider how you would continue to meet your repayments if your income were to fall due to illness, injury, or redundancy.
Income protection and mortgage payment cover can offer a financial lifeline in difficult times. These types of policies are designed to help cover essential costs like your mortgage if the unexpected happens. Speak to your adviser about what protection options are available and which ones might be suitable for you.
Why You Should Not Wait
The mortgage market is already becoming busier. Many borrowers are looking to remortgage early, which could lead to delays later in the year. By acting now, you can beat the rush and give yourself the best chance of securing a good deal.
Some lenders allow you to reserve a mortgage rate in advance. That means you may be able to secure today’s rates even if your current deal does not end for a few more months.
Your mortgage adviser will be able to tell you whether this is an option and help you navigate the process.
In Summary
If your mortgage deal is ending within the next year, now is the time to act. Speak to your mortgage adviser to:
Review your current deal and find out when it ends
Understand how your repayments may change
Explore new mortgage deals ahead of time
Consider income protection or mortgage payment cover
The sooner you start planning, the more options you are likely to have. A quick conversation now could prevent a costly shock later.
Sources:
The Independent (2024). Mortgages: Bank of England warns costs will jump for millions by end of 2027. Available at: https://www.independent.co.uk/news/uk/home-news/best-mortgage-rates-deals-price-b2655926.html [Accessed 25 Jun. 2025].
Your home/property may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.
All the information in this article is correct as of the publish date 3rd July 2025. 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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