Homeowners who have been waiting patiently for cheaper borrowing costs may need to rethink that strategy quickly. Not long ago, the prevailing expectation was that 2026 would bring a gentler path for interest rates, with the Bank of England’s Monetary Policy Committee widely expected to continue trimming borrowing costs as inflation cooled and economic growth remained subdued. That outlook has shifted sharply. 

The war in Iran has disrupted the assumptions that had underpinned forecasts for lower rates, and the lending landscape now looks far more uncertain, more volatile and potentially more expensive than many borrowers had planned for. Recent comments from Megan Greene, a member of the Bank of England’s Monetary Policy Committee, underline how serious that change in tone has become. Greene said that the case for higher rates strengthens as the conflict continues and warned that tighter monetary policy in the coming weeks or months may prove necessary. 

She also indicated that she had considered backing a rate increase at the committee’s previous meeting, when policymakers voted eight to one to leave rates unchanged, with Huw Pill, the Bank’s chief economist, the sole member to support a rise. Greene’s warning matters because it signals that the debate is no longer simply about when cuts may begin again, but whether the next move could instead be upward.

For homeowners, this is not an abstract policy discussion. It directly affects mortgage pricing, remortgage availability and the cost of doing nothing. Many borrowers whose fixed-rate deals ended chose not to remortgage immediately, hoping that lower rates were just around the corner. Instead, they rolled onto their lender’s standard variable rate (SVR), often as a temporary move while they waited for better deals to emerge. That decision now looks far riskier. A standard variable rate is usually materially higher than the best remortgage products on the market, meaning borrowers can end up paying significantly more each month simply because they delayed taking action. It is also a rate the lender can change, which leaves the homeowner exposed not just to broader market trends but to the lender’s own pricing decisions. In other words, an SVR is not only expensive, it is unstable.

That instability matters even more in the current environment. Greene has argued that the risk of failing to act against inflation may be greater than the risk of tightening policy unnecessarily, noting that inflation has exceeded the Bank’s target in seven of the past ten years. Her concern is that households and firms may start treating above-target inflation as normal and behave accordingly, through wage demands, price-setting and spending decisions. If that takes hold, bringing inflation back under control could require an even stronger policy response later. 

This is exactly why mortgage borrowers should not assume that today’s pricing will still be available tomorrow. If lenders believe the base rate may rise, or even that the market funding costs will stay elevated for longer, they may decide to reprice or withdraw their most competitive deals at short notice. Homeowners who have delayed remortgaging in the hope of a better opportunity could find the opposite happens: the window narrows, the best deals disappear and monthly costs rise further.

There are already signs that the market is feeling that pressure. Nationwide reported the first monthly decline in house prices this year in May, and its chief economist, Robert Gardner, attributed the loss of momentum to higher energy prices and rising market interest rates. That combination is important. Higher energy costs squeeze household budgets, while increased mortgage rates reduce affordability and weaken demand. Together they create a more difficult environment for both buyers and existing owners. For borrowers approaching the end of a deal, or already sitting on an SVR, this makes complacency especially costly. Waiting may once have seemed like a tactical pause, but in a rapidly changing lending market it can turn into a financial penalty.

The cautious voices at the Bank do still matter. Governor Andrew Bailey has suggested that higher market borrowing costs have already tightened financial conditions in practice, which may buy policymakers some time before they act. But from a homeowner’s perspective, that nuance offers limited comfort. Whether rates rise because the Bank increases the base rate directly or because markets and lenders price in inflation risk ahead of time, the end result can still be the same: mortgage borrowing becomes dearer. 

The distinction matters for central bankers, but for households focused on monthly affordability, the practical issue is what they will pay when they next refinance. That is why the emerging debate within the MPC is so significant. A committee that was once expected to spend 2026 cutting rates now appears to be wrestling with the possibility that tighter policy could be needed instead.

For homeowners, the message is straightforward: understand the lending environment as it is now, not as it was forecast to be months ago. The assumptions that supported a wait-and-see approach have weakened considerably. Letting a mortgage roll onto an SVR in the hope of near-term cuts is increasingly a gamble that may cost more with every passing month. SVRs are generally higher than remortgage deals from the outset, and they can increase quickly, leaving borrowers exposed to fast-rising repayments and a rushed search for a new deal under pressure. At the same time, lenders faced with the prospect of higher funding costs or a change in base rate expectations may pull or reprice their best products with little warning. In this climate, shopping around for a remortgage sooner rather than later is not simply a matter of convenience, it may be the most sensible step available to preserve affordability, regain certainty and avoid paying more than necessary on one of the largest debts a household will ever carry.