1.8 Million UK Mortgages Expiring in 2026: Why Homeowners Who Locked in Pandemic Rates Could Pay £5,000+ More This Year

Around 1.8 million homeowners across the UK will see their fixed-rate mortgage deals expire this year, forcing many who secured historically low pandemic-era rates to confront a challenging new financial reality.

According to UK Finance, the wave of expiring fixed deals will trigger a 10% increase in remortgaging activity throughout 2026, as borrowers seek to navigate a market where rates remain significantly higher than those locked in during 2020 and 2021.

Why Pandemic-Era Borrowers Face Payment Shock

Homeowners who secured five-year fixed deals at the end of 2020 or in 2021, when the Bank of England base rate was at historic lows, now have limited options. Data from the HomeOwners Alliance shows the average five-year fixed rate in January 2021 was approximately 2.6%, compared to 4.5% today.

In 2023, Bank of England projections indicate that by late 2026, nearly one million mortgage holders will see their monthly payments increase by at least £500 ($672), equating to over £6,000 ($8,067) annually. A further two million households face increases of between £200 ($269) and £499 ($671) per month.

'Some of these will include buyers who managed to lock into a cheap rate in 2020, so they will need to seek advice for support if they are concerned about rising repayments, [perhaps] by moving onto a higher fixed rate,' said Rachel Springall, finance expert at Moneyfacts.

The Silver Lining: Remortgagers Could Save Thousands

Not all borrowers face bleak prospects. Those currently on their lender's standard variable rate (SVR) stand to make substantial savings by switching to a fixed deal.

Springall calculates that remortgage customers moving from the average SVR of 7.25% to a two-year fixed rate at 4.28% (at 60% loan-to-value) could save over £5,000 ($6,722) in repayments over just one year. This calculation is based on a £250,000 ($336,121) mortgage over a 25-year term.

Homeowners coming off two-year fixes secured in early 2024 may also benefit. At 5.93%, the average two-year fixed rate in January 2024 was 1.10 percentage points higher than current offerings, meaning these borrowers could see their monthly costs fall when they remortgage.

Record Product Choice Offers Hope

The mortgage market enters 2026 with renewed optimism. Currently, borrowers have access to 7,158 mortgage products, the highest number since October 2007 and 650 more than were available in January 2025, according to the latest Moneyfacts UK Mortgage Trends Treasury Report.

'Borrowers and lenders will be in a state of optimism, off the back of a positive 12 months for the mortgage market in 2025,' Springall noted. 'Expectations are high for a booming market in 2026.'

Multiple Bank of England base rate cuts during 2025 helped push average fixed rates below 5%, with the average two-year fix now at 4.83% and the five-year at 4.91%.

What This Means for Your Finances

UK Finance forecasts that gross mortgage lending will rise by 4% to £300 billion ($403.4 billion) this year, with remortgaging activity reaching £77 billion ($103.5 billion).

James Tatch, head of analytics at UK Finance, cautioned that despite positive trends, affordability remains tight. 'Even with welcome tweaks to lending regulations this year, affordability is now very tight and this is likely to limit borrowing options for potential buyers in 2026,' he said.

For the 1.8 million households facing expiring deals, the message is clear: act early and compare options. Those currently on an SVR could save thousands annually by switching, while borrowers transitioning from pandemic-era fixed rates should prepare for higher monthly payments and consider seeking professional mortgage advice.