Millions Face Soaring Mortgage Bills Amid Interest Rate Surge

The UK's five million homeowners face soaring mortgage bills due to rising interest rates. The Bank of England Financial Committee forecasts that millions will see their mortgage repayments skyrocket by hundreds of pounds by 2028.

The average rate on a new two-year fixed deal has risen to 5.59%, with monthly payments for someone taking out a £250,000 mortgage over 25 years reaching around £1,549.

This is compared to the pre-war average rate of 4.85% in February 2022, where monthly repayments stood at £1,440 - a difference of over £100 per month.

Lenders such as NatWest, HSBC, Barclays, and Lloyds have increased their borrowing rates, while Santander raised rates for homebuyers by up to 0.3 percentage points and remortgagers.