UK Homeowners Face £1,300 Mortgage Hike Due to Middle East Tensions

Millions of UK homeowners are facing higher mortgage bills due to rising interest rates. According to the Bank of England's Financial Policy Committee, five million households will see their borrowing costs jump by the end of 2028.

This is one million more than previously predicted in December, and a result of fresh tensions in the Middle East that have driven up oil prices and concerns about global energy supplies.

The average two-year fixed residential mortgage rate has risen to 5.59%, while the five-year fixed rate has reached 5.61%. This means that borrowers could see their monthly repayments increase by £1,300 over the next 12 months compared to rates at the start of February 2026.

Rachel Springall from Moneyfacts warned that lenders have resorted to pulling deals temporarily as they reconsider their pricing plans, with over 100 deals withdrawn from sale in the last week alone.