Millions of pandemic-era borrowers face higher mortgage rates, says expert
Elliot Castle said: “We’re now expected to see more than 1.8 million homeowners in 2026 come off fixed-rate mortgage terms, and with this news it’s going to make the market more difficult.”
Millions of pandemic-era borrowers will be forced to renegotiate their mortgages at significantly higher rates, according to Elliot Castle (pictured), CEO of We Buy Any Home.
His comments came as the average 5-year fixed mortgage rate rose to 5.92%, its highest level since October 2023, according to data from Moneyfacts.
Many borrowers took out 5-year fixed-rate mortgages during 2020 and 2021, when the Base Rate was at a record low.
Around 1.5 million homeowners came off fixed-rate deals in 2025, while more than 1.8 million are expected to do so in 2026.
Castle said: “The mood in the property market has shifted. I think the wide expectation was that in Q3 or Q4 of this year that we would see borrowing costs go down.
“But the view has shifted significantly and now it’s widely accepted that, if anything, borrowing costs are going to go up.
“There are tens of thousands of homeowners who will be coming off fixed rate terms at some point this year and they will have been hoping and praying for a softer landing for a new product.”
Castle added: “Now the expectation is that actually it will go the other way and you have a whole tranche of homeowners that could be paying over double what their mortgage payments were on the previous product.
“In 2025 alone, 1.5 million homeowners came off of fixed rate products that have had to renegotiate their mortgage on significantly higher terms. Therefore we’ve seen a slowing in the market.
“We’re now expected to see more than 1.8 million homeowners in 2026 come off of those terms, and with this news it’s going to make the market more difficult.”
Castle said global events, political developments and swap market movements affected fixed mortgage pricing.
He said: “An escalation of the Iran war and a new prime minister whose messaging does not seem to have gone down well in the markets leaves us now with the expectation that borrowing costs are going to go up.
“It’s going to hit both investors and homeowners in the pocket.
“It’s going to make things more difficult, and it’s important to stress that even though the Bank of England base rate remains the same as of today, it’s not purely the base rate that dictates the mortgage rates.”
He added: “Swap markets heavily affect the expectation and fixed rate products, and at the moment, wherever you look, the expectation is that those prices are only going one way, and that’s up.
“You’ll have a whole host of investors and landlords who were hoping to get beneficial rates, and that will be hurting them.
“Costs are going up for landlords as it is. This is only going to make their lives more difficult.”
He said: “If you’ve got homeowners or investors who agreed products in advance, they will have limited periods to take those products and acquire properties.
“If they don’t do so they will be encountering higher costs, so what we will inevitably see is even more fall-throughs on properties.”
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