As 2025 gets underway, it’s difficult to ignore the looming wave of fixed rate mortgage maturities. According to UK Finance, around 1.8 million borrowers will see their deals expire this year, making it one of the busiest years on record for the mortgage market in the UK.
For borrowers and brokers alike, this creates a mix of challenges and opportunities, as shifting economic conditions and varying borrower circumstances collide.
FEELING THE PINCH
For those coming off five-year fixed-rate mortgages, the outlook may be a little daunting. Many of these borrowers locked in their deals back in 2020, when the Bank of England’s base rate was down at an all-time low of 0.1%. The leading fixed rates at the time ranged between 1% and 2%, offering incredibly attractive monthly repayments.
Little wonder so many borrowers opted to lock in for a longer term.
Fast-forward to today, and the picture looks starkly different. Base rate has risen significantly, with fixed rates starting at 4% or more. For borrowers accustomed to ultra-low repayments, the jump in monthly costs could be eye-watering, at a time when budgets are already more stretched given the persistently high rates of inflation over the last couple of years.
This kind of financial shock underlines the need for timely, well-informed advice.
ACHIEVING GOALS
By contrast, those coming off two-year fixed rates might be in for a pleasant surprise. Many of these deals were taken out in 2023, when rates were peaking after aggressive base rate hikes to tackle inflation. With inflation in a healthier spot now, and the Bank of England trimming base rate, the rates on offer today are far more attractive.
For these homeowners, the remortgaging process isn’t about damage control – it’s about seizing opportunity. Lower repayments could allow them to reduce their overall term, pay down more capital, or even redirect savings to other financial goals.
A TRUSTED PARTNER
Amid this complex landscape, mortgage advisers have a critical role to play in helping guide their clients towards making the right decision.
First and foremost, it’s important for advisers to be thinking about how they plan to reengage with clients whose deals are maturing. By reaching out six to nine months in advance, advisers will give themselves and the client time to adequately assess the client’s circumstances and needs, and identify which products are most suitable.
This proactive approach isn’t just about securing better rates. It’s about providing peace of mind during what can be a stressful time. Borrowers facing significant rate hikes will benefit from tailored advice on how to manage higher repayments, for example if they need to consider extending their mortgage term. Meanwhile those seeing their rates fall can work with advisers to maximise their financial gains, perhaps by making overpayments in order to clear the debt more quickly.
2025’s remortgaging surge is far from a one-size-fits-all scenario. Each borrower’s situation will vary, and advisers need to offer solutions that reflect this diversity. For some, affordability might be the top priority, while others may want to explore options that offer greater flexibility or additional features.
This is where the expertise of a skilled mortgage adviser becomes invaluable. By taking the time to understand each client’s goals, challenges, and financial position, advisers can deliver strategies that match both the immediate needs but also long-term aspirations.
MAKING THE MOST OF THE OPPORTUNITY
The level of fixed rate maturities set to take place this year are a terrific opportunity for mortgage brokers. By connecting with clients well in advance, and preparing them for what may lie ahead, advisers can build stronger relationships and ensure the clients keep coming back to them over the long term.
These conversations are also a chance to go over the client’s other financial needs, which may have evolved. Do they have sufficient protection in place? Are they saving into a pension? Is there a broader wealth management plan in place?
This isn’t just about crunching numbers or finding the lowest rates. It’s about positioning the broker as a trusted partner in a borrower’s financial journey. By being proactive, advisers can ensure that not only is the client receiving the best possible service, but also establish a long-term relationship.
