2.3m UK households brace for higher mortgages in 2027

Summarised from 3 outlets · Updated 2 Nov, 12:29 · Archive

More than 2.3m UK households face higher mortgage payments when their fixed-rate deals end in 2027.

More than 2.3m UK households face sharp rises in mortgage payments when their fixed-rate deals end in 2027. The Bank of England's monetary policy committee is expected to raise the base rate from 3.75% to 4% on 5 November, potentially the first of four quarter-point rises over the next 12 months.

Borrowers who secured five-year fixed-rate mortgages in the first half of 2022 face particularly large increases. At that time, the average five-year fix was 3.37%, with interest rates at around 1%. Current five-year fixed rates stand at 6%. On a £200,000 mortgage with a 25-year term, monthly repayments on a five-year fix would have risen from around £986 in 2022 to £1,289 now, an additional £3,600 annually.

Mortgage approvals in the UK fell to a near three-year low in September as potential buyers were deterred by rising borrowing costs. Swap rates affecting fixed-rate mortgage pricing have risen due to volatility in bond markets, driven in part by energy prices and inflation fears linked to the Middle East conflict.

How it is being reported

• Banks battle for mortgages ahead of looming interest rate hikeBritain’s biggest banks are battling for mortgage market share on razor-thin margins even as borrowers rush to remortgage ahead of looming interest rates hikes. The central bank is expected to lift its base rate to four per cent on Thursday – its first hike in three years – following a sharp resurgence in inflation. The [...]City AM · 2 Nov, 12:29
• Millions in UK set for higher mortgage costs next year as interest rate rise imminentThe next Bank of England vote takes place on Thursday 5 NovemberThe Independent · 2 Nov, 11:53
• Millions in UK brace to remortgage on worse deals as rate rise loomsMore than 2.3m households face jump in payments in 2027, after expected increase in Bank of England rate this week More than 2.3m UK households face a sharp rise in mortgage payments as they come off fixed-rate deals in 2027, with the Bank of England expected to begin raising interest rates this week. The Bank’s nine-member monetary policy committee (MPC) is widely expected to increase the base rate from 3.75% to 4% on 5 November after UK inflation rose further to 3.5% in September. Continue reading...Guardian Business · 2 Nov, 06:00

In this story: Bank of England · United Kingdom · UK Finance

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