UK Mortgage Payment Shock (2026/27)
What happens to your payment when a cheap fixed rate ends - worked examples, fix vs tracker vs SVR, Mortgage Charter options and what to do if you cannot pay.
What happens when a cheap fixed rate ends: the size of the jump, the choice between a new fix, a tracker and the standard variable rate, what the Mortgage Charter lets you do, and where to get help if the new payment is too high.
How big the jump can be
Capital repayment, monthly. The rates are illustrative, not quotes; the payment is on the full original loan and term for simplicity, so a part-repaid mortgage will see a smaller jump. Try your own figures in the mortgage repayment calculator.
| Loan and term | Old rate and payment | New rate and payment | Increase |
|---|---|---|---|
| £200,000, 25 years | 1.5% → £800 | 4.5% → £1,112 | +£312 |
| £300,000, 25 years | 1.5% → £1,200 | 4.5% → £1,667 | +£468 |
| £400,000, 30 years | 1.8% → £1,439 | 4.5% → £2,027 | +£588 |
| £500,000, 30 years | 1.8% → £1,798 | 4.5% → £2,533 | +£735 |
Related guides
- UK Mortgage Affordability 2026/27 - how lenders assess a new application.
- UK Debt Prioritisation 2026/27 - the mortgage is a priority debt.
- UK Emergency Fund Target 2026/27 - a buffer for the squeeze.
- UK Universal Credit 2026/27 - income support if needed.
Frequently asked questions
Why are payments jumping when fixed rates end?
Many borrowers fixed when rates were very low. Bank Rate was 0.1% until December 2021, peaked at 5.25% from August 2023, and was 3.75% after the Bank of England's 17 September 2026 decision. A deal fixed before rates rose was priced off a much lower base, so the new rate on the same balance can mean a much larger payment. The table on this page shows the size of the jump at illustrative rates.
What are my options when my fixed rate ends?
(a) A new fixed rate, for payment certainty. (b) A tracker that moves with Bank Rate, cheaper or dearer as rates move. (c) Doing nothing, which normally moves you to the lender's standard variable rate, usually its most expensive rate. (d) A product transfer: a new deal with your existing lender, often simpler than a full remortgage; under the Mortgage Charter, signatory lenders let customers who are up to date switch without a new affordability check. (e) Extending the term or (f) a temporary switch to interest-only, both covered by the Charter. (g) Overpaying before the deal ends to reduce the balance.
When should I start looking for a new deal?
Around six months before your current deal ends. Under the Mortgage Charter, signatory lenders let customers approaching the end of a fixed rate lock in a deal up to six months ahead and still ask for a better like-for-like deal up until the new term starts. That gives you time to compare your lender's offer with the wider market, directly or through a broker.
What is the Mortgage Charter?
A set of commitments agreed by HM Treasury, the FCA and lenders in June 2023. For signatory lenders: customers who are up to date can switch to interest-only for six months, or extend their term with the option to go back to the original term within 6 months, without a new affordability check and without affecting their credit score; customers can lock in a new deal up to six months ahead; and a borrower will not be forced to leave their home without consent, except in exceptional circumstances, in less than a year from the first missed payment. Contacting your lender for help does not affect your credit file. Payments after a temporary change may be higher, and total interest will be.
Should I fix or take a tracker?
It depends on how much payment certainty matters to you and how much rate risk you can absorb. A fix gives a known payment for the term but you lose out if rates fall, and there are usually early repayment charges. A tracker follows Bank Rate plus a margin, so payments fall if Bank Rate is cut and rise if it goes up. Nobody knows where rates will go; choose the option whose worst case you could live with.
Can I extend my mortgage term?
Usually, subject to the lender and your age at the end of the new term. It lowers the monthly payment and raises the total interest. On £250,000 at 4.5%, going from 25 to 35 years cuts the payment from about £1,390 to £1,183 a month, but total interest rises from about £166,874 to £246,920 if nothing else changes. Under the Mortgage Charter, an extension can be reversed within 6 months. Overpaying later, where your deal allows it, claws some of the interest back.
What if I cannot afford the new payment?
(1) Contact your lender before you miss a payment; asking for help does not affect your credit file, and the options include a term extension, temporary interest-only, payment deferral or part interest-part repayment. (2) Check benefits: if you get Universal Credit, Support for Mortgage Interest can pay interest on up to £200,000 of the mortgage after 3 months in a row on UC; it is a loan, repaid with interest when you sell or transfer the home. (3) Review your budget and recurring bills. (4) Extra income: under the Rent a Room Scheme you can earn up to £7,500 a year tax-free from letting a furnished room in your home. (5) Free advice is available from Citizens Advice, MoneyHelper and StepChange.
Should I overpay before I remortgage?
Often it helps. A lower balance means a lower payment at any rate, less interest over the remaining term, and may move you into a lower loan-to-value band with cheaper deals. Check your mortgage offer for how much you can overpay without an early repayment charge; many fixed deals allow a set percentage each year. Overpaying saves interest at your mortgage rate, so compare that with what the money could earn elsewhere and keep an emergency fund first.