Research by Compare the Market and L&C Mortgages, which obtained data through a Freedom of Information (FOI) request to the Financial Conduct Authority, found that 971,105 five-year fixed rates were secured in 2021.
This means that there is a significant number of deals on lower rates that will be maturing into a higher rate environment, the firms said.
The report noted that in 2021, according to Bank of England data, the average five-year fixed rate at 75% loan to value (LTV) was 1.58%.
Assuming an average UK house price at the time of £249,309 and a 25% deposit, repayments on a rate of 1.58% would have been around £9.060 per year to £755 per month.
L&C data shows that the lowest remortgage rate for the top 10 lenders currently stands at 3.89%.
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Based on the prior repayment calculations, this would mean that a borrower would still owe £155,246.
On a five-year fixed rate of 3.89% this would take monthly payments from £755 to £932, and annual payments would jump from £9.060 to £11.184.
This is around £177 more each month or £2,124 annually.
If a lower five-year fixed rate were to lapse onto the standard variable rate, assuming a rate of 7.24%, this could increase monthly repayments from £755 to £1,226, or from £9,060 to £14,712.
Borrowers with mortgages up for renewal are urged to consider shopping around for deals and comparing offers.
Sajni Shah, mortgage expert at Compare the Market, said: “With nearly one million families due to come off ultra-low five-year fixed terms, many will be shocked to see their repayments jump by around £2,124 a year on average. Despite the recent base rate reduction, certain households will be on thin ice as they struggle with the ongoing cost of living pressures on their budget.
“The good news is homeowners could find themselves a better deal and it’s wise for anyone due to remortgage in 2026 to check their options now. Even small differences in rates can add up to thousands over the life of a term, so shopping around, comparing lenders and locking in a competitive rate could make a huge difference in keeping rises to a minimum.”
David Hollingworth, associate director at L&C Mortgages, added: “Homeowners who locked in a super low rate five years ago have been sheltered from the ups and downs in interest rates in recent years. Although a hike in payments is inevitable once the fix ends, the good news is that mortgage rates have improved substantially recently and are much lower than at the peak.
“That will help to limit the increase, but it makes shopping around for the best deal even more vital. Starting the process several months in advance will help borrowers prepare for higher rates and enable a smooth transition to a new deal.”
