Almost a million homeowners are bracing for a fresh financial squeeze, with monthly mortgage costs jumping by close to £100 as borrowing rates climb.

Those rolling off five-year fixed deals and locking in to new rates are paying an average of £94 more each month, according to figures from Connells Group.

The jump reflects a sharp shift in mortgage pricing, with average rates on new five-year fixes at 4.72%, compared with just 2.5% on the deals many borrowers secured in 2021 before interest rates surged.

In total, around 971,000 five-year fixed mortgages are due to expire this year, according to the Financial Conduct Authority, while UK Finance estimates roughly 1.8 million fixed-rate deals will come to an end.

The latest increases come amid global economic turmoil linked to the conflict involving Iran, which has unsettled markets and pushed lenders to reprice mortgages rapidly.

Thousands of deals have been pulled or repriced since strikes were launched on February 28 amid fears over disruption to oil and gas supplies through the Strait of Hormuz, fuelling inflation concerns.

Hopes of cheaper borrowing have also been dented. The Bank of England, which had cut its base rate six times since August 2024, held rates at 3.75% on March 19 rather than pressing ahead with another reduction.

For many borrowers, the shift has been abrupt. Those who secured new deals between late January and late February saw smaller increases of between £22 and £66 a month on average, the Connells data shows.

Mark Harris of SPF Private Clients told the Times: “The past few weeks have been extremely difficult for those coming off fixed rates who may well have anticipated that they would be in a better position than they now find themselves.”

Even borrowers on shorter fixes are feeling the strain. Homeowners coming off two-year deals taken out in 2024 are now seeing only modest savings. Those securing a new deal since Sunday will save an average of £32 a month, with rates edging down only slightly from 4.91% to 4.85%.

That is a far cry from expectations earlier this year. Before the latest market upheaval, borrowers refinancing two-year fixes were on track to cut payments by about £100 a month. Deals agreed in the final week of February, for example, averaged 4.12% compared with 5.01% previously – delivering savings of £133 a month.

Karen Noye of Quilter said: “Mortgage rates have moved back in the wrong direction for those remortgaging, and the overriding emotion is now disappointment. Clients who fixed more recently, often at higher rates, had been pinning their hopes on a meaningful drop when they came to refinance.

“Instead, many are now coming to terms with the reality that the change in their monthly payments is minimal, or in some cases non-existent.”

Borrowers approaching the end of a fixed deal can typically secure a new rate up to six months in advance, while retaining the option to switch if better offers emerge.

Experts also advise checking product transfer deals from existing lenders, which can offer competitive rates without additional affordability checks.