Fix now or wait? 1 million more face a bigger mortgage bill

Your fix is running down and every week the news seems to bring a new reason to worry. First it was six lenders cutting rates in a single day. Then it was rates jumping by the sharpest daily margin since April. Now the Bank of England itself is telling you that a million more people than it expected are about to see their bill go up. If you're sitting on a deal that ends in the next few months, the question isn't academic: do you lock in a rate today, or hold your nerve and hope things calm down before your fix actually runs out?

The headline number is this: a little over 5 million UK households are now projected to see their mortgage repayments rise by the end of 2028, up from the nearly 4 million the Bank forecast back in December, an increase of about a million homeowners in seven months (Bank of England Financial Stability Report, published 7 July 2026). The reason is the escalating conflict in the Middle East, which has pushed swap rates up and hardened the market's view that borrowing costs are staying higher for longer.

Why the bill got bigger for so many people

The Bank's own figures show how quickly the picture shifted. The average quoted rate on a new two-year fixed mortgage at 75% loan-to-value has climbed to 4.92%, up from 4.20% in December 2025 (Bank of England Financial Stability Report, 7 July 2026). At 90% loan-to-value, the average rate has gone from 4.57% to 5.32% over the same period. That's not a small drift: on a typical £220,000 repayment mortgage over 25 years, moving from 4.20% to 4.92% alone adds about £90 a month, or roughly £1,082 a year, calculated using the standard UK repayment mortgage formula.

Not everyone is affected equally. A typical borrower coming off a fix in the next two years faces a relatively modest £45 a month increase, smaller than the £120 jumps that hit borrowers between 2022 and 2024. But around 750,000 households who locked into rates below 3% and whose deals expire in 2026 face an average rise of £170 a month (Bank of England Financial Stability Report, 7 July 2026). If your current rate starts with a 2, this is the group the Bank is talking about, not the more comfortable-sounding average.

So if your existing fix is under 3% and due to end this year, don't anchor your expectations to the reassuring £45 headline figure: the maths says you're closer to the £170-a-month group, and the sooner you start comparing deals, the more of that gap you can close.

The maths: lock in now versus wait it out

Here's the side-by-side comparison on that same £220,000 mortgage over 25 years. Accepting today's average rate at 4.92% costs £1,275.86 a month. The current best-buy rate at the same 75% loan-to-value band, 4.57% from first direct (Moneyfacts, 10 July 2026), costs £1,231.59 a month. That's a £44 a month gap, worth roughly £531 a year, purely for shopping the whole market instead of settling for the average deal your existing lender quotes you.

That gap matters because most people don't shop around. Roughly 83% of borrowers whose fix expired in 2024 took a product transfer with their existing lender rather than a full remortgage (Uswitch/MoneySavingExpert product transfer research, via Bank of England Money and Credit release, 29 June 2026), and product transfers are rarely the cheapest option on the market. Our recent look at why remortgage approvals collapsed 35% in a single month found the same pattern: inertia, not lack of choice, is what's costing people money.

That means the first decision isn't fix now or wait, it's whether you're even comparing the whole market or just accepting whatever your current lender offers, and that single step is worth up to £44 a month before you've made any call on timing at all.

Why locking in early has almost no downside

This is the part most people don't realise: most mainstream lenders, including Halifax and Nationwide, let you apply for and reserve a new fixed rate three to six months before your existing deal ends. If a cheaper rate appears on the market before your mortgage actually completes, the large majority of lenders let you switch down to it at no extra cost. That makes the decision asymmetric. If you lock in today and rates fall, you can usually still take the lower rate later. If you wait and rates carry on rising, as they have every day this week, you're the one absorbing the increase.

The swap rate move behind this is genuinely sharp: the two-year SONIA swap rate, which lenders use to price fixed deals, has risen from 3.978% a month ago to 4.177%, and the five-year swap from 4.008% to 4.231% (Moneyfacts, 21 July 2026), pushing average fixed rates to their steepest daily rise since 2 April. Our explainer on why fixed mortgage rates can move without a Bank Rate change covers the mechanism in full if you want the detail. For the break-even question, the point that matters here is simpler: for waiting to pay off, average rates would need to fall back below where they sit today by the time your fix actually ends, and every signal this month, from the swap rate spike to the Bank's own upgraded household forecast, points the other way.

So if the choice in front of you is between locking in a rate you can only downgrade later, or waiting on the hope that a week of rising rates reverses itself in time, the asymmetry of the bet is doing most of the talking.

What this means for you

If your current fix ends within the next six months, the maths points toward acting now rather than waiting: get a whole-of-market comparison or speak to an independent broker this week, apply for a rate reservation with whichever lender offers the best deal for your loan-to-value band, and keep an eye on the market until completion since you can typically switch down if a cheaper rate appears. Frankly, if you're within that six-month window and you haven't started this process yet, you're already carrying more risk than upside by waiting, given where swap rates have moved this month. If your fix has longer to run, there's less urgency, but it's worth checking your loan-to-value band now: our piece on whether to fix for 2 or 5 years sets out the break-even thinking for locking in a term once you do act, and improving your equity position before you remortgage can move you into a cheaper rate band regardless of which way the wider market goes next.