Having locked-in their five-year mortgage deals at a time when rates were very favourable, many households are now finding themselves coming off their fixed deals and in need of new ones. This, however, comes at a time when the mortgage market looks very different. Indeed, many two-year and five-year fixed rates have climbed back above the 5% mark, and many lenders are repricing products rapidly in response to market volatility.

The number of households who will be shopping around for new deals will be in the hundreds of thousands, with analysis of UK Finance figures revealing that 255,000 households will come off five-year fixed deals between April and the end of June. June in particular is a crunch point, when a further 67,000 loans worth £25bn mature. June alone accounts for 10.5% of loan volumes and 11.2% of lending value, making it the single most concentrated month of the year. So with so many households in need of finance, what are their options? 

The case for taking early action
Naturally, in such a fast-moving environment, borrowers who are coming off long-term fixed-rate deals will feel reluctant to lock in further five-year deals at much higher costs. The temptation will be there to hold off as long as possible in the hopes that a resolution to the conflict in the Middle East.

Banks and non-bank lenders, whose own costs of fixed-rate money is impacted by inflation, are closely monitoring upward inflationary pressures caused by geopolitical events including the current goods blockade through the Strait of Hormuz.