Mortgage experts have warned that ultra-low mortgage rates five years ago will move onto far higher rates in the months ahead, with hundreds of thousands of households set to be affected
UK households are on the brink of a financial precipice as experts caution that “Britain’s mortgage cliff is here,” with many set to “feel the drop” imminently.
Mortgage specialists have sounded the alarm, predicting a shift from the ultra-low mortgage rates of five years ago to significantly higher rates in the coming months. Borrowers are bracing themselves for a “face a brutal reality check” in today’s mortgage market.
Patricia McGirr, founder at Burnley-based Repossession Rescue Network, has issued a dire forecast: “Britain’s mortgage cliff is here and hundreds of thousands of households are about to feel the drop”. This news comes after ‘thousands of Brits get a shock letter from HMRC after drastic new tax rule comes into force’.
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She highlights the looming issue for homeowners whose five-year fixes taken out during the pandemic are expiring, warning: “Five-year fixes taken during the pandemic are now expiring, and many homeowners are about to face a brutal reality check”.
Birmingham Live reported McGirr’s warning of a steep increase in monthly repayments, especially for those who secured deals at sub-2 percent rates and are now facing rates between 4 percent and 5 percent.
The financial strain could lead to drastic changes in personal circumstances, with McGirr noting: “For some, this means scrapping life plans just to stay afloat”. She added: “With squeezed affordability, we could see home-movers freeze, downsizers accelerate and first-time buyers pause”.
The founder suggests that the resulting lack of movement in the housing market could indirectly affect property prices: “That could stall fluidity and indirectly chill prices. For those who took out two-year fixes during the 2022 post-mini-Budget panic, they’ll actually see payments fall”.
McGirr describes the current situation as a divide between the fortunate and the less so, urging lenders to provide support. She pleaded: “It’s a mortgage market of haves and have-nots, and we need lenders to be ready to step up with solutions for those facing real challenges”.
She calls for immediate action to assist those caught in this predicament, emphasising the need for clear communication and fair treatment: “Consumers caught in this horizon event need clarity, flexibility and fair treatment now more than ever”.
Ranald Mitchell, director at Norwich-based Charwin Mortgages, concurred: “For many borrowers, 2025 will prove the hangover after the house party”. He highlighted the stark reality for homeowners by explaining how “millions are waking up to find their cheap-as-chips pandemic mortgage deals have vanished, replaced with monthly payments that bite”.
Mitchell painted a grim picture for those coming off low-rate deals, sharing: “For five-year fixers coming off sub-2% rates, some are facing £300–£500 extra a month. It’s not just a shock, it’s a financial slap. This won’t crash the market, but it will chill it”.
He also suggested a shift in the property landscape: “Potential movers may pause and reflect on their new monthly financials. The days of borrowing big and breezing through affordability checks are over.”