Why 2028 matters for UK mortgage borrowers
2028 is shaping up to be a checkpoint year for UK mortgage repayment. Three separate timelines converge on it: temporary repayment arrangements agreed during the 2022–2023 rate spike reach the end of their permitted periods, the Financial Conduct Authority's (FCA) post-Consumer Duty mortgage rule review moves into implementation, and a large cohort of borrowers who extended terms or switched to interest-only under the Mortgage Charter face decisions on reverting to their original structures. None of these changes is a surprise, but each has a direct effect on monthly payments, and the borrowers who plan two years ahead will have materially better options than those who wait for their lender's letter.
This article sets out what is changing, who is affected, and what homeowners, buyers, landlords and advisers should be doing now.
The Mortgage Charter unwind: temporary arrangements expire
In June 2023, the government and major lenders agreed the Mortgage Charter, which allowed borrowers struggling with higher rates to request a temporary switch to interest-only payments or a term extension, without a fresh affordability check or credit file impact. These arrangements were always designed as temporary breathing space.
Lenders have handled reversions differently, but the practical position for many borrowers is that their temporary arrangement will need to be reviewed and, in most cases, reversed by 2028. Reverting from interest-only to a capital and interest basis on the same term increases the monthly payment substantially, because the borrower must begin repaying principal again, often on a shorter remaining term than they originally held.
Worked example of a reversion
Take a borrower with a £250,000 balance who switched to interest-only at 5.5% in 2023. Their payment covered interest alone, roughly £1,146 per month. Reverting to repayment over a 20-year term at the same rate pushes the payment to around £1,720 per month. That £570 difference is the number borrowers need to plan for, and it is why lenders are expected to contact affected customers well in advance of reversion dates.
Borrowers should not wait for that letter. Lenders including Nationwide, Halifax and NatWest have committed to proactive contact under Charter commitments, but the borrower who approaches their lender 12 to 18 months early can compare reversion, part-and-part structures, further term extension and product transfer on equal terms.
FCA mortgage rule reform: the end of the mortgage market review era
The FCA launched a wide-ranging review of mortgage rules in 2023, building on its discussion paper DP23/5 and subsequent consultation work. The review is expected to relax some responsible lending requirements introduced under the 2014 Mortgage Market Review (MMR), so that borrowers who have demonstrated they can afford their payments face fewer barriers when remortgaging, extending terms or borrowing more.
Key proposals relevant to repayment structures include:
- Easing the affordability test for borrowers with an existing mortgage who have kept up payments, potentially removing the need for full income verification in some remortgage cases.
- Giving lenders more flexibility to offer term extensions and interest-only periods to borrowers approaching retirement, where the current retirement interest-only (RIO) market remains thin.
- Simplifying rules so borrowers can switch repayment methods without triggering a full underwriting process in defined circumstances.
The FCA has signalled implementation in stages, with firms expected to have adjusted processes and systems through 2027 and into 2028. For borrowers, the practical effect is that 2028 should offer more repayment flexibility than at any point since the MMR: longer terms into later life, easier method switches, and fewer affordability re-checks for proven payers. For advisers and lenders, it means updating affordability models, systems and staff training, and re-testing how they present repayment options at product transfer.
The fixed-rate cliff and payment shock arithmetic
Separate from any rule change, the arithmetic of fixed-rate expiries continues to drive repayment changes. Borrowers who fixed for five years in 2023 at rates near 5% will reach their expiry in 2028. Depending on the Bank of England base rate path, some will remortgage onto lower rates and see payments fall; others rolling onto standard variable rates (SVRs), which have sat in the 7–8% range at several major lenders, will see payments rise sharply.
Payment changes in 2023 and 2024 depended heavily on action taken before expiry. Borrowers who secured a product transfer or remortgage up to six months ahead avoided SVR exposure entirely. Product transfer windows at most major lenders now open three to six months before the fixed period ends, and there is no cost penalty for reserving a rate early if it falls before completion with most lenders' switch-down policies.
What buyers should assume when budgeting in 2028
Buyers taking mortgages in 2028 should stress-test affordability against rates higher than the headline deals on offer. Lenders' stress rates have eased from their 2023 peaks, but prudent budgeting still means modelling a payment rise of 15–20% at refix. First-time buyers stretching to maximum borrowing should also model the effect of the FCA's flexibility: a 35-year term reduces the initial payment but leaves more principal outstanding when the borrower reaches 50, which is the cohort the FCA reforms are trying to help refinance.
Interest-only borrowers: the 2028 reckoning
Interest-only is not just a Charter issue. A structural stock of interest-only mortgages from the 1990s and 2000s, originally backed by endowment policies, still exists, and many of these plans mature between now and the early 2030s. Borrowers with shortfall concerns should request a projection from their endowment provider or lender now, because options narrow as the maturity date approaches.
The FCA's reforms should make it easier for these borrowers to convert to repayment, extend terms, or move to a RIO product in retirement. But conversion is cheapest when there are still 15 or more years of term left. A borrower converting £200,000 of interest-only debt to repayment over 10 years at 5% faces payments near £2,120 per month; over 25 years, closer to £1,170. The earlier the conversion, the lower the payment.
Landlords and the repayment question
Buy-to-let borrowers face a parallel set of pressures. Section 24 tax changes have already pushed many higher-rate taxpayers towards limited company structures, and 2028's rule changes interact with this: easier term extensions and interest-only flexibility under the FCA review apply to regulated mortgages, but most buy-to-let lending is unregulated, so landlords should check whether their lender passes on the new flexibilities at all.
Landlords should also note that EPC requirements for rental properties remain on the policy agenda, and capital expenditure on energy efficiency competes directly with mortgage repayment capacity. A landlord planning works in 2027 should model the combined effect on cash flow before choosing between a repayment conversion and continued interest-only.
Practical steps to take before 2028
Whether you are a homeowner, buyer or landlord, the actions below are worth completing in 2026 rather than 2028:
- Diary your fix expiry. Note the date, the current rate, and the lender's product transfer window. Set a reminder six months out.
- Check whether you are on a Charter arrangement. Ask your lender in writing when your temporary interest-only period or term extension ends and what the reversion payment will be.
- Request a repayment illustration. Ask for the monthly payment on reversion, on a part-and-part basis, and on a full term extension. Compare all three.
- Review your repayment vehicle. If you hold interest-only debt, confirm the investment or sale plan still covers the balance, and get a written projection.
- Speak to a whole-of-market broker. Product transfer rates are not always the best available, and the FCA reforms may open remortgage routes that were closed under MMR rules.
- Overpay if you can. Most lenders allow 10% annual overpayment without penalty. On a £250,000 balance at 5%, £200 per month of overpayment shortens a 25-year term by roughly four years and saves tens of thousands in interest.
How agents and property professionals should respond
Estate and letting agents will feel these changes indirectly. Buyers in 2028 will ask longer questions about term length, retirement age limits and repayment flexibility, and vendors will want realistic timelines for buyers emerging from Charter reversions. Firms that can explain repayment structures clearly, and that keep accurate records of property condition, tenancy status and compliance documents, will move transactions faster.
For agencies managing portfolios or advising landlord clients, documentation is the bottleneck. Keeping inventories, inspection records and compliance certificates current is what allows a landlord to evidence income and property condition quickly when remortgaging or restructuring. Tools such as property inventory software cut the admin time involved, which matters when a lender asks for supporting documents at short notice ahead of a product transfer.
Key dates and milestones to watch
- 2026: Expect further FCA policy statements and firm-level implementation planning following the mortgage rule review consultations.
- 2027: Lenders begin proactive contact with Charter borrowers approaching reversion; product transfer windows open for 2023 five-year fixes.
- 2028: Peak expiry year for 2023 five-year fixes; FCA reforms in force at most major lenders; Charter reversion reviews largely complete.
Mark these dates in your own calendar against your mortgage terms, and act at the start of each window rather than the end. Lenders' capacity to process reversion reviews, product transfers and term changes will be stretched in 2028, and the borrowers at the front of the queue will get the widest choice of options.
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