Major lenders left mortgage rates unchanged this week as close to one million five-year fixed mortgages are expected to come up for renewal in 2026, exposing many homeowners who had locked in ultra low borrowing costs to the risk of sharply higher repayments.

The average rate for a two-year fixed mortgage came in at 4.49% this week, down from the previous 4.48% according to data from Uswitch.

The average five-year fixed deal came in at 4.98%, down from 4.99%. Those are the average rates across all lenders for a 75% loan-to-value (LTV) mortgage, meaning buyers need a down payment of at least 25% of the purchase price.

The Bank of England cut interest rates to 3.75% from 4% last month, taking borrowing costs to their lowest level in almost three years.

Nearly 1 million households took out five year fixed rate mortgages in 2021, leaving many borrowers facing higher repayments as those deals begin to expire, according to analysis by a comparison website.

A total of 971,105 five year fixed rate regulated mortgage products were opened that year, based on data obtained from the Financial Conduct Authority following a freedom of information request on behalf of Compare the Market. The figure does not account for mortgages that may have been repaid early before 2026.

Borrowers who fixed in 2021 benefited from a period when sub 2% five year rates were widely available, reflecting the ultra low interest rate environment at the time. Mortgage rates rose sharply in subsequent years but have eased more recently, helped by the Bank of England cutting the base rate by 0.25 percentage points to 3.75% in December.

Data from L&C Mortgages show that the average of the lowest remortgage five year fixed rates across the 10 largest mortgage lenders stood at 3.89% in January 2026.

Compare the Market estimates that higher rates could push up some households’ annual mortgage payments by as much as £2,124. The calculation is based on average house prices in 2021 and assumes a borrower who put down a 25% deposit.

Borrowers who allow their mortgage to roll onto a standard variable rate when a fixed deal ends could face even steeper increases.

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David Hollingworth, associate director at L&C Mortgages, said: “Homeowners that locked in a super low rate five years ago have been sheltered from the ups and downs in interest rates in recent years.

“Although a hike in payments is inevitable once the fix ends, the good news is that mortgage rates have improved substantially recently and are much lower than at the peak.

“That will help to limit the increase, but it makes shopping around for the best deal even more vital. Starting the process several months in advance will help borrowers prepare for higher rates and enable a smooth transition to a new deal.”

A spokesperson for UK Finance said: “Around 1.8 million households are due to come off fixed rate deals this year, and we expect around half of these to be five-year fixes.”

Meanwhile, the number of mortgage approvals made to home buyers fell to its lowest level in a year-and-a-half in December, according to Bank of England figures.

Some 61,013 mortgage approvals for house purchase were recorded in December 2025, which was down from 64,072 the previous month, and the lowest level since 60,920 approvals in June 2024.

Finance and property experts said they expect to see momentum rebuilding in the months ahead, now that uncertainties around last year’s autumn budget are out of the way.

Thomas Pugh, chief economist at audit, tax and consulting firm RSM UK, said: “The drop in mortgage approvals to 61,013 is consistent with weak momentum in the housing market in (the fourth quarter of 2025), which is unsurprising given the uncertainty generated by the budget.

“However, now that there is some certainty around property taxes, interest rates were cut in December, and are likely to be cut again in April, the housing market should rebuild some momentum this year, especially as there is likely to be a degree of pent-up demand from the weakness in [the fourth quarter].”

The figures were released as a separate report from HM Revenue and Customs (HMRC) said around 100,440 home sales took place in December, which was 5% higher than December 2024 and “marginally” lower (less than 1%) than in November 2025.

Karen Noye, a mortgage expert at wealth manager Quilter said: “Both the Bank of England Money and Credit statistics and HMRC’s property transaction data point to a housing market very much in a holding pattern.”

Here’s more detail on major lenders’ mortgage rates this week:

HSBC (HSBA.L) has a 3.66% rate for a two-year deal, with a £999 booking fee, which remains unchanged from last week. For those with a premier standard account with the lender, this rate is 3.63%.

Looking at the five-year options, the fixed standard rate is 3.88% with a £999 fee, which is also unchanged.

Both cases assume a 60% LTV mortgage, meaning buyers need a deposit of at least 40%.

HSBC (HSBA.L) offers 95% LTV deals, meaning you only need to save for a 5% deposit. However, the rates are higher, with a two-year fix at 4.68% or a five-year fix at 4.72%.

This is because their financial situation and deposit size determine the rate someone can get. The larger the deposit, the lower the LTV, allowing buyers to access better deals because lenders consider them less risky.

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The lender has recently unveiled a cashback offer of up to £2,000 to ease the upfront costs of entering the housing market.

The bank’s enhanced incentive package, which brokers say could ignite a fresh round of competitive pricing among high-street lenders, marks one of the most generous cashback schemes currently available. The measure is aimed at supporting borrowers struggling with deposit and moving costs at a time when affordability pressures remain high despite a recent easing in mortgage rates.

NatWest’s (NWG.L) two-year deal is 3.51% with a £1,495 product fee, the same as last week.

The cheapest five-year fixed deal comes in at 3.70%, also unchanged. In both cases, you’ll need a deposit of at least 40% to qualify for the rates.

Barclays (BARC.L) has a two-year fix available at 3.57% with a £899 product fee, which is unchanged from last week. The five-year deal also remains unchanged, at 3.79%.

The lender is making across different deals, namely:

4.15% Premier 2 Yr Fixed £0 product fee, 85% LTV, Min loan £5k, Max loan £2m will decrease to 3.97%

4.20% 2 Yr Fixed £0 product fee, 85% LTV, Min loan £5k, Max loan £2m will decrease to 4.02%

4.50% Premier 2 Yr Fixed £899 product fee, 90% LTV, Min loan £5k, Max loan £640k will decrease to 4.15%

4.55% 2 Yr Fixed £899 product fee, 90% LTV, Min loan £5k, Max loan £640k will decrease to 4.20%

4.65% 2 Yr Fixed £0 product fee, 90% LTV, Min loan £5k, Max loan £640k will decrease to 4.40%

4.68% 3 Yr Fixed £899 product fee, 90% LTV, Min loan £5k, Max loan £640k will decrease to 4.48%

4.32% Premier 5 Yr Fixed £899 product fee, 90% LTV, Min loan £5k, Max loan £640k will decrease to 4.12%

4.37% 5 Yr Fixed £899 product fee, 90% LTV, Min loan £5k, Max loan £640k will decrease to 4.17%

4.45% 5 Yr Fixed £0 product fee, 90% LTV, Min loan £5k, Max loan £640k will decrease to 4.25%

4.10% Green Home 2 Yr Fixed £0 product fee, 85% LTV, Min loan £5k, Max loan £2m will decrease to 3.92%

4.55% Green Home 2 Yr Fixed £0 product fee, 90% LTV, Min loan £5k, Max loan £640k will decrease to 4.30%

4.27% Green Home 5 Yr Fixed £899 product fee, 90% LTV, Min loan £5k, Max loan £640k will decrease to 4.07%

Barclays (BARC.L) launched 95% loan-to-value (LTV) mortgages for purchasers of new-build houses, in a move aimed at easing the path to home ownership, especially for first-time buyers.

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The offer applies to new-build houses with a maximum purchase price of £600,000. Previously, buyers were required to pay a 10% deposit, meaning a £60,000 deposit on a £600,000 property. Under the new criteria, that requirement could be halved to £30,000.

Earlier in the year, Barclays (BARC.L) launched a mortgage proposition to help new and existing customers access larger loans when purchasing a home.

The initiative, known as Mortgage Boost, enables family members or friends to effectively “boost” the amount that can be borrowed toward a property without needing to lend or gift money directly or provide a larger deposit.

Under the scheme, a borrower’s eligibility for a mortgage can increase significantly by including a family member or friend on the application. For example, Barclays (BARC.L) stated that an individual with a £37,500 annual income and a £30,000 deposit could borrow up to £168,375, meaning the most they could afford would be a home worth £207,375.

However, with Mortgage Boost, the total borrowing potential can increase if a second person, such as a parent, is added to the application. In this case, if the second applicant also earns £37,500 a year, the combined income could push the borrowing limit to £270,000, enabling the buyer to afford a home worth up to £300,000.

Nationwide (NBS.L) has a two-year fix set at 3.72% for first-time buyers. For a five-year deal, the rate is 4.06%. Both deals require a 40% deposit and come with a £999 upfront fee.

First-time buyers also receive £500 cashback when they complete their mortgage with Nationwide (NBS.L).

The lender this week announced an expansion of its high loan-to-income (LTI) lending, a change that could see some borrowers access tens of thousands of pounds more than previously available.

Under the new terms, home movers and customers remortgaging will now be able to borrow up to six times their annual income. This enhanced offering extends to both new and existing customers moving home or remortgaging, and applies to loans with a loan-to-value (LTV) up to 95%.

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To qualify for this increased borrowing, sole applicants must demonstrate a minimum annual income of £75,000, while joint applicants must demonstrate a minimum yearly income of £100,000. These income thresholds remain consistent with previous requirements, which allowed eligible groups to borrow up to 5.5 times their income.

The changes mean that, for example, a sole applicant who was a new customer moving home or remortgaging, with an income of £75,000, may previously have been able to borrow up to £412,500 from Nationwide (NBS.L). But now they could potentially borrow up to £450,000 — an increase of £37,500.

Halifax, the UK’s largest mortgage lender, offers a two-year fix at 3.72% (also 60% LTV), which remains unchanged from last week.

The lender, owned by Lloyds (LLOY.L), also offers a 5-year rate of 3.88%, also untouched.

It has a 10-year deal with a mortgage rate of 4.87%.

Santander (BNC.L) withdrew its 60% LTV mortgage products for first-time buyers on borrowing of less than £250,000 on two- and five-year terms on 19 September.

A spokesperson for the bank said that the “change was part of a reprice following the changes to swaps after the Bank of England held interest rates”.

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Santander (BNC.L) continues to offer products with LTVs of 85% or above for first-time buyers, with the cheapest two-year fix at 4.06% and the cheapest five-year fix at 4.19%.

For home movers with a 40% deposit, Santander (BNC.L) is now offering a two-year fixed rate of 3.51% and a five-year deal of 3.72%, a drop from the previous 3.75% deal.

NatWest (NWG.L) offers the most competitive 2-year deal on the market for first-time buyers, with a fixed rate of 3.51%. When it comes to a five-year fixed deal, NatWest (NWG.L) also takes the crown, with its 3.70% offer. However, any of these deals requires a hefty 40% deposit.

With the average UK house price at £297,755 in December, prospective homebuyers would need around £120,000 as a deposit to secure the cheapest rates.

A growing number of homeowners in the UK are opting for mortgage terms of 35 years or longer, with a significant rise in older borrowers stretching their repayment periods well into their 70s.

Skipton Building Society is allowing first-time buyers to borrow up to 5.5 times their income, helping more borrowers get on the housing ladder.

Leeds Building Society reduced the minimum household income requirement on its first-time-buyer mortgage range. This means single or joint first-time buyer applicants with a household income of £30,000 may now be able to borrow up to 5.5 times their earnings.

Mortgage holders and borrowers have faced higher repayments in recent years, as the BoE’s higher base rate has been passed on by banks and building societies.

Many homeowners will hope the Bank of England continues to cut interest rates. At the same time, savers will likely root for rates to remain at or near their current levels.

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