The perfect storm – Flavin

Trump’s standoff with Iran is dragging on. Oil is jumpy. Inflation isn’t dying the way the Bank of England hoped. And if this drifts through summer with no resolution, a base rate of 4.5% stops being the doom forecast and starts being the base case. Some trading desks are already there.

Underneath all that sits a problem we’ve been pretending isn’t a problem for nearly five years. The remortgage cliff. 1.8 million households roll off a fixed deal this year. Another 1.6 million next year. Most borrowers locked in between 2020 and early 2022, when five-year fixes dipped below 2% and two-year deals sometimes started with a one. Those rates were never going to last. Everyone in our industry knew it.

The quiet assumption, the one we’ve all leaned on in client meetings, was that by the time these borrowers came back to market, rates would have settled around 3.5%. Painful but liveable. A household coming off a 1.8% fix onto a 3.5% deal on a £220,000 mortgage was looking at maybe £170 a month more. They’d cancel a streaming service, delay the kitchen, grumble at the broker, and get on with life.

That conversation is dead.

The average two-year fix today is 5.73%. The five-year is 5.66%. If swap rates climb on the back of an energy shock, those numbers climb with them. We are no longer talking about a jump from 1.8% to 3.5%. We are talking about a jump from 1.8% to 5.5%. Maybe higher.

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Run the maths. On a £220,000 mortgage over 25 years, that isn’t £170 extra a month. It’s around £440. That’s £5,300 a year, post-tax, gone. On £250,000, it’s north of £6,000. For a working family, that money was already spoken for. It was the holiday, the car finance, the kids’ activities, the rainy-day buffer.

Multiply by 1.8 million households this year and 1.6 million next. You don’t need a PhD to see what happens to hospitality, retail, leisure, home improvements and the new car market. Discretionary spending gets ripped out by the tens of billions. Employment softens. Arrears creep up. Lender appetite tightens. The mortgage market doesn’t sit outside the economy. It’s one of the biggest pipes inside it.

So what does this mean for you?

It means this is the year that either makes your firm or quietly buries it. Three things I am hammering with every coaching client right now.

Get in front of every maturity earlier

Six months out is no longer adequate. 12 is the new baseline. If your CRM isn’t pinging you 12 months ahead of every single maturity, you’re handing clients to the firm that does. The brokers running rings around the rest are reviewing maturities monthly and phoning their clients, not emailing them. In a market this jumpy, the ability to lock a rate that can still be revised downward is one of the few things a broker can do that a comparison site cannot. Use it.

Stop selling rate. Start selling affordability.

A client who shops on rate alone right now will make a bad decision and blame you for it. The job has changed. You are not finding the cheapest two-year fix. You are designing a five- to 10-year affordability plan. Longer fixes for some. Offsets for others. Part-and-part for the right clients. Honest overpayment conversations while the income is still there. That conversation justifies a bigger fee and earns deeper loyalty. The rate-quote conversation puts you in a race with an algorithm. Guess who wins that race.

Rebuild the protection conversation. Now.

When budgets tighten this hard, the first thing households cancel is the thing they can’t see paying out. Income protection. Critical illness. Life cover. Every one of those cancellations is a future claim that won’t be paid and a future client who will remember whether you raised it or stayed quiet. Protection is the single most underdeveloped revenue line in most mortgage firms. In a year where purchase volumes compress, it is the line that defends your profit and loss margin.

One more thing, because nobody else will say it out loud. A big chunk of the 3.4 million households rolling off fixed deals haven’t heard from a broker since the day they completed. No annual review. No maturity nudge. Nothing. They are about to walk into the worst rate shock of their adult lives and most of them will start with a Google search, not a phone call to you. If you think loyalty is going to carry the day, it won’t. Loyalty in this industry is built on contact, and contact is what most firms have quietly let slide. The brokers who win the next decade are the ones picking up the phone now to clients they haven’t spoken to in three years, swallowing the awkwardness of that first call, and rebuilding the relationship before the remortgage decision is already made somewhere else.

This is not a coming storm. It is here. Iran. Oil. Inflation. The maturity cliff. And a Bank of England that has run out of room to be nice.

3.4 million households are about to walk into a financial decision bigger than anything they’ve faced in a decade. Every one of them needs proper advice. Most of them don’t have a broker yet. The brokers who treat this as a crisis will spend 18 months managing decline. The brokers who treat it as the biggest demand event of their career will look back on 2026 as the year their business changed shape.

Pick one.