Mortgage rates have turned sharply higher in early 2026 after months of gradual falls. One million fixed-rate deals expire between April and September. Here is a clear-eyed guide to the question everyone with a mortgage is asking.
Why mortgage rates are rising again
Through 2025, UK mortgage rates fell steadily as the Bank of England cut its base rate six times — from 5.25% in August 2024 to 3.75% by December. Some 2-year fixed deals briefly dipped below 4% at the start of 2026, and buyers and remortgagers had good reason to feel optimistic.
That changed in March 2026. Conflict in the Middle East pushed oil and gas prices sharply higher, raising the risk of a second wave of inflation. Financial markets responded immediately — specifically in the swap market, which is what lenders actually use to price fixed-rate mortgages.
Swap rates are the interest rates at which banks lend to each other over a fixed period. They move independently of the BoE base rate, based on where markets think interest rates will be in future. When swap rates rise, fixed mortgage rates follow within days — even if the base rate hasn't moved. This is why you can wake up to a lender repricing their products before any announcement from the Bank of England.
In March alone, hundreds of mortgage products were withdrawn and repriced. The average 5-year fixed rate is now around 5.54% and the 2-year is around 5.56%, according to HomeOwners Alliance. Best-buy deals at 60% LTV remain more competitive, but have also drifted upward compared to the lows seen in January.
The numbers: where rates stand now
Product
Jan 2026
Apr 2026
Monthly cost*
2yr fixed (avg)
~4.3%
~5.56%
+£85/mo vs Jan
5yr fixed (avg)
~4.9%
~5.54%
+£42/mo vs Jan
Best 2yr (60% LTV)
~3.7%
~4.0–4.2%
—
SVR (typical)
~7.2%
~7.2%
Avoid at all costs
BoE base rate
3.75%
3.75% (held)
—
*Monthly cost change based on a typical £200,000 repayment mortgage over 25 years. Sources: HomeOwners Alliance, Moneyfacts, L&C. Rates change daily — check current best buys before applying.
Three scenarios for the rest of 2026
Whether to fix now, or wait, depends on which of these scenarios plays out. Nobody can tell you with certainty — but understanding the logic of each helps you make a decision you can stand behind.
📈 Scenario 1: Rates stay high or rise further
If Middle East conflict persists and oil prices stay elevated, inflation could re-accelerate. The BoE may hold — or even hike. Swap rates stay elevated, fixed mortgage deals remain above 5%. Anyone who fixes now locks in before further increases. Probability: currently what markets are pricing.
⏸️ Scenario 2: Rates plateau, then fall slowly
Conflict de-escalates. Inflation stays around 3% but doesn't spike. The BoE holds at 3.75% for most of 2026 and begins cutting in Q4. Fixed rates gradually fall through H2 2026, ending the year around 4.5–4.8%. Waiting may save something, but not dramatically. Probability: considered most likely by property economists.
📉 Scenario 3: Rates fall faster than expected
Conflict ends quickly. Oil prices fall, inflation drops toward 2%. The BoE cuts twice by year-end, to 3.25%. Fixed rates fall to 4.0–4.3% by autumn. Those who fixed in April pay a premium for 12+ months. Probability: considered unlikely given current market pricing.
⚖️ The honest answer
Nobody predicted swap rates would rise 60 basis points in three weeks. Nobody reliably predicted the falls in 2025 either. The case for fixing now is not that rates will definitely rise — it is that knowing your monthly payment for 2–5 years has a real value. Financial certainty allows you to plan your life. The case for waiting is that scenario 2 or 3 may play out and save you money. But waiting requires tolerating uncertainty and the risk that rates move against you.
2-year vs 5-year fixed: which to choose?
This is a separate question from whether to fix at all — and it's equally important.
🔒 5-year fixed
Arguments for: locks in certainty for longer; no remortgage stress in 2028; protects against scenario 1 above; rates are similar to 2-year right now (unusual).
Arguments against: if rates fall in 2027–28, you'll pay above market for longer; early repayment charges if you need to move; life may change (job, family size, property).
🔒 2-year fixed
Arguments for: sooner back in the market if rates fall; less commitment; if scenario 3 plays out, you benefit from lower rates in 2028.
Arguments against: remortgage stress again in 2028; rates are barely lower than 5-year right now, so you pay almost the same and get less certainty; more remortgage fees over time.
💡 The rate gap has almost disappeared
Normally, 2-year fixed deals are cheaper than 5-year. Right now, average 2-year rates (5.56%) are slightly higher than 5-year (5.54%). This inverted yield curve — the same signal seen in fixed savings bonds right now — means the market expects rates to fall over time but is uncertain about the short term. In practical terms: the 5-year rate currently offers more certainty for almost the same monthly payment. That's an unusual position.
What to do based on your situation
🏠 Fix ending in next 3 months
Act now. Most lenders allow you to secure a new rate up to 6 months ahead of your deal ending, at no cost — and you can often switch to a better deal if rates fall before completion. There is almost no reason to wait. The risk of delay (rates rising further) far outweighs the upside (rates falling slightly before you complete).
📅 Fix ending in 3–6 months
Start the conversation now. Get a mortgage offer reserved — this costs nothing, doesn't obligate you, and protects you against rates moving higher. Keep monitoring. If rates fall materially before completion, your broker can switch you to the better deal in most cases.
⏳ Fix ending in 6–12 months
Monitor rates monthly. You have time to watch how the market develops. Set a calendar reminder for 5–6 months before your deal ends to begin the process. Don't assume rates will fall — build your budget around rates at current levels so you're not caught off guard.
💷 Mid-fix with 12+ months left
Check your Early Repayment Charge (ERC). Most fixed deals have ERCs of 1–5% in the early years, which typically makes breaking early uneconomical unless you are moving home. Run the numbers using the Remortgage Savings Calculator — it will tell you if the ERC cost is worth paying to exit early.
🔑 Buying your first home
Affordability calculations will look tighter at 5%+ rates. Use the FTB Affordability Simulator to model what you can borrow at today's rates — not rates from earlier in the year. If you already have a mortgage offer, check the expiry date with your broker. Most offers last 3–6 months and can often be extended.
⬆️ Considering overpaying
At 5%+, overpaying your mortgage delivers a guaranteed, risk-free return equal to your mortgage rate. With savings accounts paying 4.5–4.75%, the maths is now closer — but if your mortgage rate is higher than your best savings rate after tax, overpaying wins mathematically. Use the Overpay vs Invest calculator to model your specific numbers.
How to prepare — practical steps
- Find out when your current deal ends. Check your mortgage statement, your lender's app, or call your lender. Then count back 6 months — that's when you should start reviewing your options.
- Know your LTV. Your loan-to-value ratio determines which rate band you fall into. Check your current outstanding balance (from your lender) and compare it to what your home is worth today. Rates typically improve significantly at 85%, 80%, 75% and 60% LTV.
- Use a whole-of-market broker, not just your current lender. Your existing lender will offer you a product transfer — fast and convenient, but it may not be the best rate available. A whole-of-market broker searches across 90+ lenders including those not available directly. MoneyHelper has a free regulated broker search at moneyhelper.org.uk.
- Reserve a rate early. Getting a mortgage offer in principle costs nothing and protects you. If rates rise further, you're locked in. If rates fall before completion, most brokers can switch you to a better deal. You lose very little by starting early.
- Don't fall onto your SVR. The standard variable rate is typically 7–8% — far above any competitive fixed deal. Every month you stay on an SVR after your fixed period ends costs you significantly. For a £200,000 mortgage, the difference between 5.5% and 7.5% is roughly £230/month.
The one million remortgagers due in 2026
The FCA estimates around one million fixed-rate deals are due to expire between April and September 2026. Many of these were taken out in late 2021 or early 2022, when rates were 1.5–2%. Those borrowers are facing a payment shock regardless of whether they fix now or wait: the era of sub-2% mortgages is over.
A homeowner with a £250,000 mortgage who was on a 2-year fix at 1.9% faces moving to something around 5.5%. That is a jump of roughly £450/month. Understanding this reality — and budgeting for it — is more important than trying to time the exact rate.
Balance
At 1.9% (old)
At 5.5% (today)
£150,000
£626/mo
£919/mo (+£293)
£200,000
£835/mo
£1,226/mo (+£391)
£300,000
£1,253/mo
£1,838/mo (+£585)
Repayment mortgage, 20-year remaining term. For your own figures, use the Mortgage Calculator below.
Frequently asked questions
Can I lock in a mortgage rate before my current deal ends?
Yes — most lenders allow you to reserve a new mortgage rate 3–6 months before your current deal expires. This is called a product transfer (with your existing lender) or a remortgage offer (with a new lender). The key advantage: if rates fall before your completion date, most lenders and brokers will allow you to switch to a better deal at no cost. There is little downside to starting early.
Why are mortgage rates rising when the base rate hasn't changed?
Fixed mortgage rates are priced off swap rates, not the Bank of England base rate. Swap rates reflect the market's expectations for future interest rates. When expectations shift — as they did in March 2026 following Middle East energy market disruption — swap rates move immediately, and mortgage lenders follow within days. The base rate only directly affects tracker mortgages and SVRs.
Should I break my fixed mortgage early to get a better rate?
Rarely worth it. Most fixed mortgages carry Early Repayment Charges of 1–5% of the outstanding balance — on a £200,000 mortgage, that is £2,000–£10,000. With rates moving upward, there is currently no obvious rate saving from breaking early either. The main exception is if you are moving home, where porting your mortgage (moving your existing deal to a new property) may be possible. Use the Remortgage Savings Calculator to model whether breaking early makes financial sense in your case.
What is a tracker mortgage and should I consider one now?
A tracker mortgage moves directly with the BoE base rate — typically base rate plus a fixed margin (e.g. base rate + 0.5%). If the BoE cuts rates, your payment falls immediately. If it raises rates, your payment rises. In the current environment — where markets are pricing in a hold or possible hike — most trackers are more expensive than competitive 2-year fixes, and carry more uncertainty. Trackers tend to make more sense when rate cuts are expected imminently and you don't want to lock in at the top of a cycle.
Is now a good time to buy a home given rising mortgage rates?
The right time to buy is when you can afford the monthly payments at today's rates, not at some hoped-for future rate. Stress-test your affordability at 6–7% — not just the rate you're offered today. If the numbers work at a higher rate, you have a reasonable buffer. If they only work at the current rate, you're stretching. House prices have held up through this rate cycle, but lower demand from higher rates may create negotiating room on price in some markets.
💡 BritSavvy note
This article is for information only. We are not authorised mortgage advisers. The right decision for your mortgage depends on your personal financial position, term remaining, and risk tolerance — a whole-of-market broker will give you regulated advice tailored to your situation. Many brokers charge nothing (they're paid by the lender) or a flat fee of £300–£500. Use the calculators below to understand the numbers before any conversation with a broker.