Oct 7, 2026 · 43 min
Mortgage repricing exposes borrowers to a tougher refinancing shock
What to Do If Your Mortgage Rate Jumps
Borrowers face higher payments and difficult housing choices even without a Bank of England base-rate increase.
- 1Swap-rate volatility can force lenders to reprice mortgages rapidly while the Bank of England leaves its base rate unchanged.
- 2Larger deposits can improve pricing, but higher rates make generous income multiples and large loans harder to sustain.
- 3Extending terms or using part-interest-only structures may ease payment shock, while new-build support could increase negative-equity risks.
Don't miss
Anthony Emerson’s practical response to refinancing shock combines longer terms, part-interest-only borrowing and repayment plans matched to income.
The brief
Average five-year mortgage rates have risen toward six percent as swap-rate volatility prompts lenders to reprice, even without a Bank of England base-rate change.
Anthony Emerson explains how deposits affect pricing and why more generous income multiples do not make larger loans safer when rates rise.
The conversation widens from monthly payments to flats and leaseholds, where oversupply, service charges, cladding and lease extensions can erode ownership economics.
For borrowers leaving very low fixed rates, Emerson suggests extending the term, considering part-interest-only structures and matching repayments to income patterns.
The proposed Help to Buy-style scheme becomes a wider test: support limited to new builds could help developers while leaving buyers exposed to negative equity.
What was said on this episode
21 statements · 10 positive · 10 negative · 1 neutral
Lenders are repricing mortgages frequently because SONIA swap rates are volatile.
“We have lenders repricing sometimes once or even possibly twice a week because the Sonya swap rates are changing quite dramatically.”
Listen at 4:41
The Iran-related oil crisis has sharply changed swap rates and gilt yields, raising fixed mortgage rates.
“the oil crisis that kicked off as part of the iranian war has caused a lot of the the sort of swap rate market and the gilts which really derives fixed rate mortgages in particular to change quite dramatically.”
Listen at 5:10
Average borrowers are receiving mortgage rates below the headline average rates.
“The average person on the street is still getting considerably better rates than that.”
Listen at 5:56
Five-percent-deposit mortgages start at approximately 5.74–5.75%.
“At 95% loan-to-value, where you're only putting down a 5% deposit, interest rates are currently starting at around about 5.74, 5.75.”
Listen at 7:44
Some lenders offer first-time buyers mortgages of 5.5 to six times income.
“lending five and a half sometimes even six times your income now”
Listen at 8:51
Borrowing above five times income creates excessive affordability strain.
“Once you go beyond five times your income, you're starting to sort of stretch things a little bit too thin.”
Listen at 8:56
The flat market may be nearing its bottom, warranting calculations by first-time buyers.
“we are nearing that point. And it might be worth those first time buyers actually doing that calculation and seeing whether or not we can facilitate what they need.”
Listen at 11:35
The flat market currently has more supply than demand.
“we have more flats on the market than we have buyers for them at the moment.”
Listen at 13:45
Recent flat buyers may fail to recover their purchase price.
“those who bought these properties in the last sort of five years are possibly looking at not quite getting their money back.”
Listen at 14:22
Flat buyers should scrutinize ground rent and service charges because they can be extremely high and persistent.
“the ground rent and service charge is two of your biggest things that you need to look out for some of them can be relatively astronomical and they never ever go down”
Listen at 20:16
Lack of confidence in the UK government has depressed the prime property market.
“the very top end of the market has been hit by a lack of confidence in the direction of travel of the UK government.”
Listen at 21:27
Homeowners facing refinancing should not panic.
“don't panic.”
Listen at 22:44
Extending a mortgage term can reduce monthly payments and mitigate payment shock.
“we can possibly extend the mortgage term, which would then allow that client to have a longer period to pay it back, which would make your monthly premiums lower.”
Listen at 23:03
Capital-repayment mortgages produce less payment shock than interest-only mortgages.
“People who are on a capital repayment mortgage are seeing a much lower payment shock”
Listen at 24:04
Borrowers should contact a mortgage broker about six and a half months before refinancing.
“Around about six and a half months out, start having the conversation with your mortgage broker”
Listen at 31:08
Borrowers should secure a remortgage offer early as protection against higher rates.
“Grab something now. Put it in the back pocket. Safe and secure so that you know what you are going to pay.”
Listen at 31:40
Tracker mortgages are currently priced about three Bank Rate rises below comparable two-year fixes.
“a tracker rate now, has three Bank of England base rate rises available within it until you get to the point where you are starting to match the available two-year fixed bank.”
Listen at 33:05
Tracker mortgage costs may rise beyond three Bank Rate increases.
“trackers are more risky because it might not stop at three Bank of England base rate rises, it might continue beyond that.”
Listen at 33:27
The proposed new-build-only policy would benefit developers and stimulate construction.
“It's really good for developers. It's really good to try and get Britain building again.”
Listen at 36:39
A 2.5% deposit leaves buyers vulnerable to negative equity after small price declines.
“Because two and a half percent is very, very small change in the property price for you to effectively fall into negative equity.”
Listen at 38:56
The government-backed product should cover new-build and existing homes, not only developers.
“It would be nice if that product was available for both new build and for second-hand homes so that we can get the whole market moving and not just doing it to benefit one person in particular, which is the developer.”
Listen at 39:42
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.