Nearly 70,000 households across the United Kingdom are preparing for a significant financial blow in early 2026, with monthly mortgage payments set to surge by hundreds of pounds.
The End of the Covid Mortgage Bargain
New analysis has revealed the scale of the impending "mortgage shock" awaiting borrowers who secured ultra-low interest rates during the pandemic. In January 2021, with the Bank of England base rate at a historic low of 0.1%, many homeowners locked in five-year fixed-rate deals below 2%.
These bargain terms are now coming to an end, forcing approximately 69,000 households to seek new deals in a radically different economic climate. The research, conducted by Nous, indicates these borrowers are in for an "unpleasant" start to the new year.
The Staggering Cost of Rising Rates
The financial impact is severe. Homeowners moving from these expired cheap deals now face average remortgage rates of around 4.9%. For someone with a typical £200,000 mortgage, this translates to a monthly repayment increase of £321.
This jump pushes the typical monthly bill from £836 to £1,157, adding thousands of pounds to annual housing costs. Greg Marsh, chief executive of Nous, warned: "These households are only just being hit by higher interest rates, and face paying thousands of pounds more each year just to stay in their homes."
Expert Outlook and Advice for Homeowners
While some relief may be on the horizon, experts caution that the era of ultra-cheap borrowing is over. Adam French of MoneyfactsCompare suggests that if the Bank of England base rate falls to 3-3.5% this year, average mortgage rates could settle between 4-4.5%.
"It’s lower than today, but still substantially higher than the ultra-cheap borrowing many households became accustomed to in the 2010s," Mr French stated. He added that while borrowers may see savings, "expectations should remain measured."
The key advice for those affected is to act early. Greg Marsh urged homeowners to "seek professional guidance early to make sure you're getting the right deal for your circumstances." Proactive planning is essential to mitigate the impact of this significant monthly expense hike.
