UK mortgage rates above 5% mean many remortgagers should prepare for higher monthly payments, especially if an older fixed deal ends in 2026. The rise is linked to global market uncertainty after the Iran conflict, which has pushed up lender funding costs and reduced hopes of near-term rate cuts. Do not assume the first renewal quote is your best option: compare your lender’s product transfer with wider remortgage deals before your current rate ends.

Why UK mortgage rates moved above 5%

Average fixed mortgage rates rose after investors became more concerned about oil, gas and inflation following the Iran conflict. According to The Guardian, citing Moneyfacts, the average two-year fixed mortgage rate reached 5.01% in March 2026 and the average five-year fix reached 5.09%, with about 1.8 million UK fixed deals due to expire during 2026 (The Guardian, 2026).

That does not mean every borrower will be offered the same rate. Your loan-to-value, credit file, income, property type, mortgage term and whether you choose a fixed-rate, tracker, discount or offset mortgage all affect pricing. Product fees can also change the real cost, so compare the total cost over the deal period, not only the headline rate.

As of June 2026, rates change frequently, verify current terms with an FCA-authorised lender or adviser before deciding.

What it means for remortgagers

The immediate risk is moving from a cheaper old fixed rate onto a much higher new deal, or accidentally falling onto your lender’s standard variable rate, known as the SVR. MoneyHelper explains that remortgaging can mean switching to a new lender or taking a new deal with your existing lender, often called a product transfer (MoneyHelper).

A product transfer can be simpler because it may avoid a full affordability assessment, valuation or conveyancing process. A full remortgage may still be worth it if another lender offers a meaningfully lower total cost, better flexibility, or a product that suits your plans, such as overpayment features or an offset facility.

Before you choose, check your current deal end date, any early repayment charge, the reversion SVR, product fees, valuation fees and legal costs. If you are borrowing more through a further advance, affordability and LTV will matter even more.

Read also: Why a Bank of England Rate Cut May Not Move Mortgage Interest Rates in the UK

Why the Bank of England matters

The Bank of England says Bank Rate influences many interest rates in the economy (Bank of England). Fixed mortgage rates are not set directly by Bank Rate each morning, but lenders price them using market expectations for future rates. If markets think inflation may stay higher, fixed-rate mortgage pricing can rise before the Bank of England changes Bank Rate.

Trackers behave differently because they usually move in line with Bank Rate or another stated benchmark. That can help if rates fall, but it also means your monthly payment can rise.

What to do now

If your deal ends within the next six months, ask your existing lender for product transfer options and compare them with whole-of-market remortgage deals. Stress-test the payment at 5%, 5.5% and 6%, then include fees so you understand the total cost.

If the higher payment looks difficult, speak to your lender early. Do not wait until you miss a payment. You can also use MoneyHelper for free guidance and consider an FCA-authorised mortgage adviser for regulated advice on your options.

This article is general educational information, not regulated mortgage advice, personalised financial advice, lending advice, legal advice or tax advice. Refisage is not authorised by the Financial Conduct Authority. Eligibility, limits, fees and availability vary by lender, product and your circumstances, and stamp duty and government schemes differ across England, Scotland, Wales and Northern Ireland. Consider speaking to an FCA-authorised mortgage adviser, MoneyHelper or a qualified tax professional before making a decision. Your home may be repossessed if you do not keep up repayments on your mortgage.