Britons face a 'staggering' 55% mortgage rise this year, figures show

2023-03-19

More cost-of-living misery for homeowners as Britons face a ‘staggering’ 55% mortgage rise this year with average interest payments set to hit £500 a month, figures show

The average cost for fixed-term holders is set to more than double
The increase follows hikes in central bank interest rates to control inflation

Average interest payments on fixed-term mortgages are set to soar by 55 per cent this year to £500 a month, figures show, piling more misery on homeowners in the cost-of-living crisis.

And the average cost for fixed-term holders is set to more than double from £322 at the end of last year to £701 a month by 2027, analysis conducted by Interactive Investor for The Mail on Sunday reveals.

The ‘staggering’ increase follows hikes in central bank interest rates to control spiralling inflation, which has been driven higher by soaring energy and food costs.

For the minority of people on tracker mortgages, the increase in monthly interest is even greater than fixers as the average monthly repayment is set to rise from £436 to £950 over the next five years.

Interactive Investor’s estimates are based on numbers in a report by the Office for Budget Responsibility that was released alongside last week’s Budget.

Average interest payments on fixed-term mortgages are set to soar by 55 per cent this year to £500 a month, figures show (stock image)

More than 80 per cent, or 6.9 million, of mortgages are fixed-term. There are 639,000 trackers and 773,000 households on standard variable rates.

An estimated 1.5 million fixed-rate mortgage deals are due to expire this year, forcing borrowers on to much higher terms.

Alice Guy, head of pensions and savings at Interactive Investor, said: ‘The UK is facing a staggering increase in mortgage costs in a story that is only just beginning to unfold.

‘There are 6.9 million UK mortgage-holders who are on fixed deals and, so far, only a few of them have moved on to new higher-rate deals. That means most of the pain is still to come.’

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