Martin Lewis is warning millions of Brits to look out for a “huge payment shock” next Spring.
It comes as mortgage rates are expected to rise sharply for those on cheap fixed deals.
In September, mortgage rates exceeded 6% for the first time in 14 years following Lizz Truss’ botched mini-budget.
But while they’ve since fallen back, rates have been on the rise as the Bank of England has bumped up interest to keep in line with soaring inflation.
Now, the money expert says borrowers will face "a huge payment shock when their current mortgages end and they're moved onto far higher rates."
He added: "The major concern for people’s mortgages – and the knock-on impact of mortgage increases on rents – is the situation in the Spring, when we expect interest rates to be higher, energy prices to be rising, and other cost of living impacts.
"So the most important thing is that now the conversations have started about what flexibility and forbearance measures can be put in place to help those struggling.
"For those worried about making mortgage repayments, the sooner you communicate with your lender the better."
According to MoneyFacts, rates have fallen back below 6% for the first time in two months - with the average two-year fixed deal sitting at 5.84% and the average five year rate at 5.67%.
Roughly two million households on cheap fixed mortgage deals will be hit hardest as they will come off deals taken out when average rates were as little as 2.34% last year.
Martin Lewis met with Chancellor Jeremy Hunt, major lenders and the Financial Conduct Authority (FCA) to discuss how best to support households transitioning from cheap fixed deals to bigger bills.
The FCA has since released guidance to lenders on how they should help struggling mortgage holders.
Lenders have been advised to offer struggling households a number of options including:
- Payment holidays - giving struggling mortgage holders a break from payments
- Extended mortgage terms - spreading debt over a longer time period as borrowers' monthly payments are reduced
- Temporarily switching to interest-only - helping reduce the monthly payments over a set period of time.
Sheldon Mills, executive director of consumers and competition at the FCA, said: "Most borrowers are able to keep up with their mortgage payments and should continue to do so.
"But if you’re struggling to pay your mortgage, or are worried you might, you don’t need to struggle alone.
"Your lender has a range of tools available to help, so you should contact them as soon as possible."
