Fixed rate borrowers looking at major payment hikes

April 2, 2026 by Brendan O'Neill

Borrowers

New figures released by Moneyfacts show that borrowers who are nearing the end of fixed five-year deals are staring at major hikes in their mortgage repayments.

Moneyfacts arrived at that conclusion based on analysis of current average UK mortgage rates. Borrowers who entered into fixed five-year deals in 2021 will reach the end of them this year, so the findings are particularly pertinent to them. The average rate that they will have been able to secure in early 2021 was 2.75%, but the situation is now dramatically different. Average rates for fixed five-year deals currently stand at 5.54%.

The standard mortgage in this country is £250,000 with a repayment period of 25 years. For fixed five-year borrowers, this would mean their monthly payments rising to £1,541 from £1,153. This amounts to an additional £388, which adds up to an annual increase of £4,655.

Switching to a fixed two-year deal does not offer a solution either, as those rates now are higher on average than fixed five-year ones. The last time that was the case was in the summer of 2025.

Caitlyn Eastell from Moneyfacts told Mortgage Finance Gazette that this situation was down to the Iran war impacting swap rates.

She then said:

“Borrowers have the option of securing a new deal typically up to six months before their current rate expires, this may be crucial for those who are concerned about rising costs.”

It shows again why working with an advisor who has CeMAP training is so important, because they will always advise borrowers to explore their options early.