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What should you do if you need to remortgage in the next 12 months?
For many homeowners over 50, the year ahead could bring an unwelcome financial shock. If your fixed-rate mortgage is coming to an end, your monthly repayments could increase significantly.
Here’s how to set about securing the best possible home loan deal.
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The Bank of England's Financial Stability Report for July 2026 estimated that more than five million households will see their mortgage repayments increase by the end of 2028 as they remortgage onto higher rates.
The typical homeowner refinancing over the next two years is expected to pay about £45 more a month.
But the impact will be much greater for about 750,000 borrowers coming off ultra-low fixed-rate deals below 3% during 2026. Customers in this bracket are expected to see their monthly repayments rise by an average of £170 a month.
Mark Harris, chief executive of mortgage broker SPF Private Clients, says: “If you need to remortgage in the next few months, it’s important to plan ahead as much as possible.
“The Middle East conflict has meant that, at 3.75%, the base rate [set by the Bank of England] has stayed higher for longer than previously anticipated and mortgage rates may be more expensive than the rate you currently have, which will mean higher mortgage payments.
“This is unwelcome at any stage of life but for older borrowers, who are keen to wind down working hours or are not earning as much as they used to, the prospect of rising mortgage payments can be worrying.”
The Bank of England’s influential Monetary Policy Committee voted to keep the base rate at 3.75% in its meeting on 30 July 2026.
Financial markets generally expect the base rate to remain at 3.75% for the rest of 2026, meaning significant falls in mortgage rates are considered unlikely.
This summer has been an uncertain time for home loan customers and the market in general. After a spell of cuts by providers, mortgage rates started rising again in July 2026.
Falling swap rates - the wholesale cost of borrowing between banks and lenders - initially prompted lenders to reduce fixed-rate deals. But that trend has reversed as renewed tensions in the Middle East pushed up inflation expectations and wholesale borrowing costs.
This led to lenders including Santander and Halifax increasing selected mortgage rates, at the end of the month with deals rising by between 0.15 to 0.35 percentage points.
But the market is not a one-way street. For example, having announced a rise in borrowing costs on some of its mortgage products, Nationwide recently cut rates for first-time buyers and remortgage customers on 4 August.
When your fixed-rate mortgage ends, your lender may offer you a product transfer. This is usually quicker and involves less paperwork than remortgaging in the wider market, but it won't always be the cheapest option.
In contrast, a whole-of-market mortgage broker can compare hundreds of products, identify lenders who are more flexible with older borrowers, and help if your circumstances have changed since you last remortgaged.
Mark Harris says: “You can book a new mortgage rate up to six months before you need it, depending on the lender, so do this for peace of mind.
“At least you have something secured, which you can budget towards. If rates fall by the time you come to take out the mortgage, you should be able to move onto a cheaper deal at that time. Essentially, you are buying yourself some peace of mind in case rates rise further.”
Before remortgaging, get an idea of your home's current value using evidence from recent local sales, or an online valuation tool.
If your home has increased in value, or if you have made overpayments along the way, you may now fall into a lower loan-to-value (LTV) band, which could help you qualify for a lower mortgage rate.
Nicholas Mendes, mortgage technical manager at broker John Charcol, says: “Lenders price mortgages in LTV bands, typically stepping down at 90%, 85%, 80%, 75% and 60%. The lower the band, the cheaper the rate.
“Sometimes a borrower is sitting just a fraction above a threshold, say at 61% or 76%. In those cases, finding a modest amount of cash from elsewhere to nudge down into the band below can pay for itself many times over in interest savings.”
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Before agreeing to a new mortgage, work out what your monthly repayments are likely to be and build them into your household budget.
Think about whether you can comfortably absorb the increase or whether you'll need to make savings elsewhere. It's also worth checking whether you'll still be able to contribute to your pension, maintain an emergency fund, and cover any upcoming large expenses.
If you're still working but planning to retire soon, make sure your new mortgage payments will remain affordable once your income changes.
Harris says: “If you are worried about budgeting, a fixed-rate makes sense. If you think five-year fixed-rates are expensive at the moment, you might prefer to take a shorter, two-year fix in the hope that in two years’ time, rates will have come down and you will be able to remortgage onto a cheaper deal."
On the other hand, if you expect interest rates to fall over the next couple of years, a variable rate mortgage or tracker mortgage will mean you benefit from a lower interest rate straight away.
There is no one-size-fits-all answer when it comes to home loans. So, consider both your financial situation as well as your future plans. If there's a realistic prospect of wanting to pay off your mortgage, move house or restructure your finances, a shorter fix or variable deal might be best.
As you approach or enter retirement you may be making good progress in repaying your mortgage and therefore be dealing with a smaller outstanding debt. This puts an even greater importance on considering the fees that apply to a new mortgage deal.
David Hollingworth, associate director at L&C Mortgages, says: “The deals with the very lowest rates are more likely to carry a bigger arrangement fee and there can be other fees such as valuation and legal costs when remortgaging.
“Mortgage advisers will factor those into the search and look beyond the rate alone to find the best overall value. The smaller the mortgage, the more likely it is that a product with a low or no fee will work out to be better overall despite carrying a slightly higher interest rate. Those with a larger outstanding balance may find that a lower headline rate can outweigh the fee.”
If you're aged 50 or older, extending your mortgage over a longer term could mean making repayments well into retirement.
Mortgage lenders will assess your expected retirement income as part of their affordability checks before deciding how much they're willing to lend.
Mendes says: “The hurdle isn't age, it's affordability. Lenders will typically only use earned income up to around age 70 to 75. So, for any term running beyond that, they'll want evidence that pension income can support the payments.
“Interest-only borrowing usually comes with tighter age limits than repayment. If it's affordable, clearing the mortgage before retirement is usually the stronger position.”
Provided by Tembo
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