Approximately 1.8 million fixed-rate mortgage agreements are scheduled to expire during 2026, according to industry data, with most borrowers expected to require new home loans.
The expiring deals come as mortgage holders face divergent payment scenarios. Borrowers completing five-year fixed terms may encounter increased monthly payments, whilst those ending two-year agreements could see reductions of several hundred pounds monthly, reflecting the volatility in interest rates since late 2021.
Standard variable rates average 7.25%
Borrowers who do not arrange replacement products before their current deals expire typically transfer to their lender’s standard variable rate (SVR). According to financial data provider Moneyfacts, the average SVR currently stands at 7.25%, with some lenders charging higher rates.
A borrower with a £250,000 mortgage could reduce monthly payments by more than £500 by securing a deal at 3.65% compared to paying the average SVR of 7.25%, according to calculations by mortgage broker L&C Mortgages.
David Hollingworth of L&C Mortgages noted that lenders typically contact customers three to four months before deal expiration, offering alternative products including two-year and five-year fixed-rate options.
Market offers exceed 7,100 products
The UK mortgage market currently features more than 7,100 different products, the highest number since 2007, according to Moneyfacts data. Fixed rates available are at their lowest levels since 2022.
Arrangement fees for new mortgages typically range between £1,000 and £2,000. Some lenders provide identical products to existing and new customers, whilst others maintain exclusive offerings for current borrowers.
Product transfers to existing lenders require fewer affordability checks and less documentation than switching to new providers, which typically request income verification, bank statements, and payslips.
Base rate decisions pending
The Bank of England is scheduled to announce its next interest rate decision on 5 February. Market observers anticipate additional base rate reductions during 2026, which could further reduce mortgage costs.
Property valuations have increased in many areas since borrowers last remortgaged, potentially qualifying homeowners for lower loan-to-value bands and improved rates. Borrowers can assess property values using sold price data from platforms including Rightmove and Mouseprice.
Mortgage brokers receive commission from lenders when transactions complete. Some firms, including L&C Mortgages, do not charge borrower fees, deriving income solely from lender payments.
