There has been quite a bit of discussion recently about homeowners facing a “mortgage reckoning” as more people come off older fixed-rate deals and have to arrange a new mortgage at today’s rates.

It’s an important issue, but I think the headline can sometimes make things sound worse than they actually are.

The reality is that it will be different for everyone, depending on the size of your mortgage, the rate you’re currently paying, when your deal ends and what options are available to you at the time.

Why is this becoming an issue now?

Over the past few years, we’ve seen mortgage rates move significantly.

A lot of homeowners who fixed their mortgage several years ago may still be sitting on rates that look very different from the rates currently available.

That means when their fixed period comes to an end, their new rate could be higher.

Bank Rate is currently 3.75%, but mortgage rates don’t simply move in line with Bank Rate. The Bank of England has said that quoted two-year fixed mortgage rates were around 95 basis points higher in September than before the recent energy shock. [1]

The Bank has also highlighted the uncertainty around inflation and energy prices, with UK inflation reaching 3.1% in August. [1]

So what could it mean for your monthly payment?

This is where the size of the mortgage really matters.

For example, imagine someone has a £150,000 mortgage with a few years left on the term.

If they’re currently paying a particularly low rate, moving onto a higher rate could increase their monthly payment.

But someone with a much larger mortgage could see a considerably bigger difference in pounds and pence.

And there’s another important point that often gets missed.

If you’ve been paying your mortgage for several years, your outstanding balance may now be considerably lower than when you originally took it out.

So it’s not simply a case of comparing your old interest rate with a new one.

You need to look at the whole picture.

Don’t wait until your deal ends

One of the biggest mistakes I see is people leaving things until the last minute.

If your fixed rate is coming to an end, it’s worth looking at your options well in advance.

That gives you time to see what rates are available, check affordability and work out whether there are any changes you could make to improve your position.

It also means you’re not forced into simply accepting whatever rate your existing lender puts you onto when your deal expires.

If you’re considering moving to a new lender, remember that you may have to pay an early repayment charge to your existing lender if you remortgage.

That’s why the timing of any remortgage is important and why it’s worth checking the terms of your existing mortgage before making any decisions.

What if rates are higher when you come to remortgage?

This is where I think it’s important not to panic.

If rates have increased since you took your existing mortgage, it doesn’t necessarily mean there’s nothing you can do.

There are still a number of things worth looking at.

Could you extend or reduce the term?

Could you make an overpayment?

Would a different product with your existing lender work?

Could another lender offer a better overall option?

Would changing the mortgage structure make sense?

And, importantly, what does the payment look like based on your actual circumstances rather than simply looking at the headline rate?

Sometimes the answer is simply that the mortgage is still perfectly manageable.

Sometimes there are ways of reducing the monthly payment.

And sometimes the numbers may mean that a conversation needs to happen much earlier.

What about people who are already struggling?

This is probably the area where I would urge people not to ignore the problem.

If your mortgage payment is going to increase and you’re already finding things tight, don’t wait until the new payment starts before doing something about it.

The earlier you look at the situation, the more options you potentially have.

It may be possible to restructure things, look at a different lender or consider other ways of managing the mortgage.

There isn’t one solution that works for everyone, so it’s really about looking at the individual circumstances.

And what happens if rates start coming down again?

This is the difficult part.

Nobody knows exactly where mortgage rates will be in six months or two years’ time.

The Bank of England has held Bank Rate at 3.75%, but its latest decision was a 6–3 vote, with three members voting for an increase to 4%. [1]

That doesn’t mean rates are definitely going up.

It simply highlights how uncertain the current environment is.

That’s why I wouldn’t base a mortgage decision purely on trying to predict what interest rates are going to do next.

Instead, I’d look at what is affordable and suitable for you based on the options available now.

The important thing is to know where you stand

If your mortgage deal is coming to an end over the next 6–12 months, it’s worth finding out what your position actually looks like.

What will your balance be?

What will your monthly payment look like at different rates?

Are you likely to pass affordability with your current circumstances?

Would moving lender make sense?

And are there any changes you could make now that would put you in a better position when the time comes?

Those are much more useful questions than simply asking whether mortgage rates are going up or down.

The current market is certainly more complicated than it was a few years ago, but that doesn’t mean homeowners should automatically expect the worst.

The key is to plan ahead rather than wait until your current deal expires and then worry about it.

If your fixed rate is coming to an end and you’re not sure what the next step should be, give me a shout and we can have a look at where you stand.

Cheers,

Pat

References

[1] Bank of England – Monetary Policy Summary and Minutes, September 2026

Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.

You may have to pay an early repayment charge to your existing lender if you remortgage.