More mortgage holders locking in new deals early or switching to interest-only: FCA

New data from the FCA shows that 880,635 mortgage holders locked into a new deal up to six months ahead of maturity in H1 2026.

381,364 mortgages locked in early during Q2, following on from nearly half a million (499,271) in Q1.

The government’s Mortgage Charter, introduced in June 2023, contains commitments, over and above FCA requirements, made by mortgage lenders. There are 47 signatories, representing around 90% of the mortgage market.

Between July 2023 and June 2026, the monthly payments on around 354,000 mortgages were reduced as people switched to temporarily paying interest-only or extended their mortgage term. 

In Q2 2026, around 22,400 mortgages saw a reduction in monthly payments due to a temporary switch to interest-only or a term extension; this is a slight increase compared to the volume in Q1 2026 (approximately 20,100).

Damien Burke, head of regulatory practice at Broadstone, commented: “Nearly a million borrowers took advantage of measures included in the FCA’s mortgage charter to proactively manage their mortgage costs by locking in a new deal up to six months ahead of maturity in the first half of 2026. With mortgage rates beginning to rise again, borrowers approaching the end of fixed rate deals should consider their options early so that they are able to secure the best rates available to them.

“The number of borrowers using temporary measures such as switching to interest-only or extending their mortgage term highlights that affordability pressures remain prevalent. While these options can provide valuable breathing space for households, they need to form part of a wider financial plan to ensure they remain sustainable over the longer term.

“We are increasingly seeing lenders develop more bespoke approaches to affordability assessments, using a broader understanding of borrowers’ individual circumstances rather than relying solely on traditional measures. The FCA released a report over the past week on the use of Open Finance in Mortgages to create policy that encourages the development of mortgage-readiness tools, richer affordability evidence and earlier identification of payment pressure.This should help ensure that those who can sustainably afford to borrow are not unnecessarily excluded from the market while maintaining appropriate safeguards around affordability.”