Around 1.8 million fixed-rate mortgages are due to expire in 2026, according to UK Finance, leaving many homeowners facing a difficult decision as cheap deals taken out during the ultra-low-rate years come to an end.
For households that fixed their mortgage in 2020, 2021 or 2022, the change could be stark. Many borrowers secured rates below 2% at a time when borrowing costs were unusually low. Now, they are returning to a mortgage market where rates remain much higher, household budgets are already under pressure, and even a small delay in taking action can have a significant monthly cost.
In this article, we’re collaborating with the team at Amazon Mortgages to look at one of the most expensive mistakes homeowners can make when their fixed-rate deal ends: doing nothing.
While much of the attention has understandably focused on higher interest rates, the real danger for many borrowers is not simply that their next mortgage will be more expensive. It is that they may drift automatically onto their lender’s standard variable rate, often known as the SVR, without comparing their options first.
What happens when a fixed-rate mortgage ends?
A fixed-rate mortgage gives borrowers certainty for a set period, usually two, three or five years. During that time, the interest rate and monthly repayments stay the same, regardless of wider movements in the market.
But when the fixed period ends, the deal does not simply continue. Unless the borrower chooses a new product, the lender will usually move the mortgage onto its standard variable rate.
An SVR is the lender’s default rate. It can move up or down at the lender’s discretion and is usually influenced by wider interest rate conditions, including the Bank of England base rate. The current Bank Rate is 3.75%, with the next decision due on 18 June 2026.
However, SVRs are typically much higher than the most competitive fixed-rate deals available to borrowers who actively review the market. Moneyfacts reported that the average UK SVR remains 7.13%, down from 7.58% a year earlier but still notably above many fixed-rate alternatives.
That gap is where the so-called “do-nothing penalty” begins.
The cost of doing nothing
Consider a homeowner with a £250,000 mortgage who fixed in 2021 at 1.8%. Their monthly repayment may have been around £1,035.
If that deal ends in 2026 and they take no action, they could be moved onto an SVR of around 7.5% to 8.5%. In that scenario, monthly repayments could rise to roughly £1,850 — an increase of more than £800 a month.
By contrast, accepting a product transfer from the same lender could reduce the jump. Product transfers are often quicker and simpler than a full remortgage because the borrower stays with their current lender. But they are not always the cheapest option.
A product transfer at around 5.5% to 6.2% could bring the same borrower’s monthly payment to approximately £1,420. That is still a rise of close to £400 a month compared with their old deal.
A more competitive remortgage found by comparing the wider market might bring the payment closer to £1,310, depending on the borrower’s loan-to-value ratio, credit profile, income and the fees attached to the new deal.
In this example, the difference between doing nothing and actively remortgaging could be around £500 a month, or about £6,000 a year. These figures are based on the worked example in the original supplied article.
Why 2026 is such an important year for borrowers
The 2026 refinancing wave matters because many of the mortgages ending this year were taken out when rates were exceptionally low. Borrowers who fixed at 1% to 2% may now be reviewing deals at more than double that level.
UK Finance has also reported strong growth in refinancing activity, with external remortgaging rising in 2025 as more customers reached the end of fixed-rate deals. Internal product transfers also increased, showing that many borrowers are choosing to stay with their existing lender rather than move elsewhere.
There is nothing wrong with staying with the same lender if the deal is competitive and suits the borrower’s circumstances. The problem comes when homeowners assume that loyalty will automatically be rewarded, or that the first offer from their current lender must be the best available.
Mortgage pricing can vary widely between lenders. A borrower’s loan-to-value ratio may also have changed since they last fixed, especially if they have paid down part of the mortgage or their property has increased in value. A lower loan-to-value can sometimes unlock better rates.
That is why reviewing the whole market can matter. The right answer may still be a product transfer, but borrowers will only know that after comparing it properly.
Why homeowners delay reviewing their mortgage
The financial argument for acting early is clear, yet many homeowners still leave their mortgage review until the last minute.
Some assume the process will be complicated or time-consuming. Others are worried that affordability checks have become tougher and prefer not to engage with the issue. There are also borrowers who expect rates to fall and delay in the hope that a better deal will appear later.
For some households, the reason is simpler: life gets in the way. Mortgage letters are easy to ignore, especially when household finances already feel stretched. But the cost of a short delay can be high.
Even spending three months on an SVR before arranging a new deal could cost hundreds, or in some cases thousands, of pounds more than necessary.
Product transfer or remortgage: which is better?
A product transfer means switching to a new deal with the same lender. It can be a practical option for borrowers who want speed, simplicity and fewer checks. In some cases, there may be no valuation or legal work required.
A remortgage means moving the mortgage to another lender. This can involve more paperwork, affordability checks and legal administration, but it may also open up access to more competitive rates or more suitable products.
Neither option is automatically better. The right choice depends on the borrower’s circumstances, including their income, credit history, equity, future plans and appetite for certainty.
For example, a borrower planning to move home soon may value flexibility and low fees. Someone who wants predictable payments for longer may prefer a five-year fixed rate. A borrower whose income has changed may need advice on whether a product transfer is safer than applying elsewhere.
The key is not to assume. A product transfer can be convenient, but convenience should not be confused with value.
How early should borrowers start looking?
Homeowners should usually begin reviewing their mortgage three to six months before their current deal ends.
Starting early gives borrowers more time to compare rates, check fees, understand their loan-to-value ratio and decide whether to stay with their lender or remortgage elsewhere. Many mortgage offers can also be secured in advance, meaning borrowers may be able to lock in a deal before their current fix expires.
That does not mean everyone should rush into the first offer they see. Mortgage rates can move, and some lenders allow borrowers to switch to a better product before completion if rates improve. But leaving the decision until the final few weeks reduces choice and increases the risk of slipping onto the SVR.
Anyone unsure where to begin can use this remortgage guide to understand the process, the likely costs, the documents usually required and the main questions to ask before switching.
What borrowers should check before their fixed deal ends
Before making a decision, homeowners should review several key points.
The first is the exact end date of the current fixed deal. This is important because switching too early may trigger early repayment charges, while switching too late could mean time spent on the SVR.
The second is the current mortgage balance and property value. Together, these determine the loan-to-value ratio, which can affect the rates available.
Borrowers should also compare the total cost of each option, not just the headline rate. Arrangement fees, valuation fees, legal costs and cashback incentives can all change the overall value of a deal.
It is also worth thinking about future plans. Anyone expecting to move, borrow more, repay a lump sum or change jobs may need a mortgage that allows more flexibility.
Finally, borrowers should consider whether they need advice. Mortgage decisions can have long-term consequences, and professional guidance may be useful where circumstances are complex.
The avoidable mistake
For many homeowners, 2026 will bring an unavoidable increase in mortgage costs. The rates available today are very different from those seen during the pandemic-era lows, and some borrowers will face a payment shock whatever they do.
But the most avoidable cost is often the simplest one: failing to act before the fixed deal ends.
Doing nothing can mean moving onto an expensive SVR by default. Accepting a quick product transfer without checking the market may also mean missing a better deal elsewhere.
The better approach is to start early, compare carefully and make a deliberate decision. For households already managing higher bills, tax pressures and everyday living costs, avoiding the “do-nothing” penalty could make a meaningful difference to monthly finances.
In a year when millions of fixed-rate deals are coming to an end, the message for borrowers is straightforward: do not wait for the lender’s default rate to make the decision for you.
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