UK Homeowners Face £1,300 Mortgage Bill Rise as Lenders Hike Interest Rates

Millions of UK homeowners are facing a significant increase in mortgage costs by the end of 2028, according to the Bank of England's Financial Policy Committee.

The forecast has risen sharply since December, with an additional one million households expected to be affected, bringing the total to around five million.

This means that when fixed deals come to an end, many homeowners may face significantly higher repayments, potentially adding over £1,300 to their annual mortgage bill.

The average two-year fixed mortgage rate currently stands at 5.59 per cent, with some lenders increasing their rates this week, including NatWest, HSBC, Barclays, and Lloyds.

Rachel Springall from Moneyfacts warned that the prolonged tensions in the Middle East have driven up mortgage costs as lenders monitor swap rates to price fixed-rate deals.