One million more UK homeowners set to face higher mortgages

An important development from the financial markets: One million more UK homeowners set to face higher mortgagesImage source, Getty ImagesByKevin Peachey Cost of living correspondentPublished6 minutes agoThe impact of the Iran war means a million more homeowners face higher mortgage bills than the Bank of England had previously expected. Just over five million homeowners should expect their monthly mortgage repayments increase by the end of 2028, according to Bank forecasts. That compared to four million projected by the Bank in December.

However, the Bank's Financial Stability Report said the hit would not be as hard as seen in recent years. A typical owner-occupier rolling off a fixed rate in the next two years is likely to face an increase of £45 on their monthly mortgage bill, the Bank said. That compares to a typical rise of £120 for those getting a new deal between the end of 2022 and end of 2024.

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More than eight in 10 mortgage customers have fixed-rate deals. The interest rate on this kind of mortgage does not change until the deal expires, usually after two or five years, and a new one is chosen to replace it. How much could my mortgage payments change?

How much are you borrowing? If you have an existing mortgage enter the outstanding balance left to pay. If not, enter the total you are looking to borrow.

£ How long will you take to pay it back? If you have an existing mortgage enter the total number of years remaining. If not, enter the total number of years you are looking to borrow over.

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years What is your current... For those with a mortgage enter the rate for your current fixed term. For those without a mortgage enter an interest rate from another source, such as a bank's mortgage rate calculator.

interest rate monthly payment interest rate % Choose an interest rate to compare with… % At this rate, your payments could change by… monthly change to monthly total The information you provided on your monthly payments would not be sufficient to pay off your mortgage within the number of years given. This calculator does not constitute financial advice. It is based on a standard mortgage repayment formula dependent on the mortgage size and length and a fixed interest rate.

It should be used as a guide only and does not represent the suitability, eligibility or availability of mortgage offers for users. For exact figures, users will need to approach an official mortgage lender. Interest rates fluctuate based on the Bank of England's base rate and market conditions The Bank's report, external also says that lower income households, including renters, are likely to be more exposed to higher energy prices.

Economists are analysing what the news means for the markets.