More than five million UK households are now expected to face higher mortgage repayments by the end of 2028, according to the Bank of England’s July Financial Stability Report, with the sharpest squeeze hitting borrowers refinancing loans first taken out before 2022.
The Bank said the number of households likely to refinance onto higher monthly payments has risen from nearly four million in its December projection to just over five million now. It linked the change to higher market rates after the Middle East conflict pushed up wholesale funding costs and mortgage pricing.
For landlords, the update matters now because it points to financing pressure lasting longer than many had hoped. Even where buy-to-let rates have started to ease, the wider rate backdrop still makes remortgaging the main risk to cash flow over the next two years.
Refinancing risk is spreading again
The Bank said around 750,000 households due to refinance by the end of this year after taking out mortgages before 2022 are expected to face the largest payment increases. While the report covers households broadly rather than landlords alone, the same funding conditions feed straight into buy-to-let pricing and product availability.
That matters in a market where lenders have been making tactical cuts without changing the wider affordability picture. Landlord Knowledge’s June coverage of the Bank Rate hold already showed that borrowing costs were still keeping pressure on landlord numbers, even before this fresh warning on refinancing.
Higher rates still outweigh headline lender cuts
The Bank’s report said the average two-year fixed 90 percent loan-to-value mortgage rate has risen to 5.32 percent, around 75 basis points above the level seen when it published its December Financial Stability Report.
For property investors, that helps explain why selective lender cuts have not yet translated into a clean improvement in deal economics. Recent buy-to-let repricing by lenders such as TMW may improve choice at the margin, but the broader cost of money remains the bigger issue.
This follows Landlord Knowledge’s recent reporting on specialist buy-to-let product changes, which highlighted how lenders are still competing mostly around niches, fees and structure rather than delivering a decisive drop in landlord borrowing costs. The latest Bank assessment suggests that pattern is unlikely to change quickly unless wholesale rates fall more clearly.
A forward look for landlords is fairly blunt: if base-rate expectations stay volatile, remortgage planning will matter more than waiting for a perfect headline rate. The biggest mistakes from here are likely to be late refinancing, weak stress-testing and assuming another summer price war will solve the problem.
What this means for landlords
- If you’re refinancing in 2026 or 2027: lock in a review early and stress-test cash flow against smaller rental margins.
- If you’re expanding: product choice may improve, but debt costs are still likely to do more damage than entry pricing.
- Watch for: whether wholesale-rate volatility fades enough for lenders to pass through more meaningful cuts.
- Bottom line: the remortgage squeeze is not over, and waiting passively is now a risk in itself.
Editor’s view
The Bank is not talking specifically about landlords, but landlords would be unwise to think they are somehow outside this squeeze. In this market, finance strategy matters at least as much as asset choice.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 08 July 2026
Sources: Bank of England
Related reading: Bank of England holds rate at 3.75% on 7-2 vote as landlord borrowing stays high
