Lending criteria could shift faster than borrowers expect as millions of fixed deals expire in 2026
Rising living costs and geopolitical uncertainty are set to tighten mortgage lending in the second half of 2026 – and some borrowers may find they can access significantly less than they expected.
The warning comes as UK Finance data shows approximately 1.8 million fixed-rate mortgages are due to expire this year, with external remortgaging forecast to rise to £77 billion, up 10% year-on-year. Many borrowers locked in at sub-2% rates five years ago are only now confronting the scale of the payment increases they face.
Sadia Mehmood, of The Mortgage Mum, told Mortgage Introducer she is experiencing a sharp rise in remortgage enquiries as deal expiry dates draw closer. "Clients are jumping up from sort of 1% or 1.5% to almost 4%, so it's a big increase in the monthly payment for them.”
According to Moneyfacts, average fixed rates at the start of January 2026 sat at approximately 4.83% for a two-year fix and 4.91% for a five-year fix.
A wait-and-see mentality takes hold
Mehmood provided an insight into how people are reacting to the situation. "Clients are not really necessarily in a hurry. It's a very wait-and-see sort of mentality at the moment."
That hesitation is being compounded by global uncertainty. The escalation of conflict involving Iran has pushed up oil prices and introduced fresh inflationary pressure into a market already navigating a delicate rate environment.
The Bank of England held its base rate at 3.75% on 30 April, but analysts at HomeOwners Alliance note the Bank has pointed to the possibility of further rises if inflation remains stubborn. For brokers on the front line, that uncertainty is translating directly into client reluctance.
With the energy price cap review due in the autumn, Mehmood expects lenders to tighten affordability assessments, reducing how much they are willing to lend.
"I think lenders will restrict lending and it will get a bit tighter because of the cost of living," she said. "Where people might be getting £20,000 or £30,000 more, I think that's going to come a bit lower."
The danger of headline-chasing
Mehmood also cautions clients against making decisions based on advertised headline rates, whether from news coverage or AI-generated search results.
"Always looking at the headline rate is not necessarily helpful," she said. "When you look at the small print, [it might be] if you're at 60% loan-to-value, or if it's an energy-efficient property."
Loan-to-value (LTV) refers to the ratio of the mortgage amount to the property's value. While lower LTV typically unlocks better rates, it requires a larger deposit or more equity. Mehmood is equally wary of clients relying on AI tools for guidance.
"Everyone naturally goes to it. When you put it into Google, it's always a ChatGPT or AI response, but just get the information clarified, because it's not always correct."
Is there ever a right time?
On timing, Mehmood said waiting for perfect conditions rarely pays off. Her approach is to lock in a rate now while retaining flexibility to revise it if conditions improve before completion.
"We'll secure a rate to prevent it going higher. But when is there ever a right time? You might wait and the rates might increase, or you might wait and actually get a lower rate."
For clients whose personal and financial circumstances are in order, she said there is little to be gained from further delay, particularly given that market expectations as of May 2026 suggest the Bank of England base rate could still move in either direction before settling.
Mehmood’s frustration with media coverage of the mortgage market is clear. "The media needs to stop scaremongering. Speak to a broker. Don't fall into the trap of what you're hearing in the media or on social media."
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