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More Than 2.3 Million UK Households Face Higher Mortgage Payments as Rate Rise Looms
UK households face sharply higher mortgage payments as fixed-rate deals end, with a Bank of England rate rise looming this week.
Key points
- The Bank of England is widely expected to raise its base rate from 3.75% to 4% on 5 November.
- UK inflation rose further to 3.5% in September, after the war in the Middle East pushed up energy prices.
- The Office for Budget Responsibility expects household disposable incomes to fall 0.6% next year after inflation.
Why it matters. Borrowers coming off fixed-rate deals face higher repayments, and a rate rise could drive swap rates and wider household costs even higher.
The Bank of England's nine-member monetary policy committee is widely expected to raise its base rate from 3.75% to 4% on 5 November, after UK inflation rose to 3.5% in September. UK Finance data show 2.3m households will reach the end of their fixed-rate deals next year, and 700,000 were forecast to switch to new rates between July and December. The Office for Budget Responsibility warned household disposable incomes would fall 0.6% next year after inflation.
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More Than 2.3 Million UK Households Face Higher Mortgage Payments as Rate Rise Looms
More than 2.3 million UK households are set to face higher payments as they move onto new mortgage deals. The increase follows an expected rise in the Bank of England's interest rate this week. Many borrowers are being forced to remortgage on less favourable terms as their current fixed deals come to an end. The Guardian reports that the jump in repayments could significantly squeeze household budgets. The Bank's decision will be announced later this week, and its outcome will determine how much further pressure borrowers face.