Five Million Homeowners Face Soaring Mortgage Bills by 2028

Five million homeowners are set to face higher mortgage bills due to rising borrowing costs by the end of 2028, according to the Bank of England Financial Policy Committee. This is one million more households than previously predicted in December.

The current average two-year fixed residential mortgage rate stands at 5.59 per cent, while the five-year fixed residential mortgage rate averages 5.61 per cent. A typical borrower seeking a new deal can expect repayments of £1,548 per month on a loan of £250,000 over 25 years.

The increase in borrowing costs is attributed to the prolonged tensions in the Middle East hitting the swap rate market, causing lenders to review and adjust their pricing plans. Finance expert Rachel Springall noted that 'the positive progress over recent weeks now feels all but lost.'