The Bank of England increased its base rate yet again in May 2023 to 4.5%, pushing borrowing costs to the highest level in almost 15 years. More than 6 million UK households will now see their mortgage payments increase by the end of 2025, with more than 4 million experiencing this in 2023.
For an average household this would mean an increase from £750 to £1,000 in monthly payments – or around 17% of average pre-tax income compared to 12% in June 2022. As the pressure of increasing interest costs, as well as rising house prices, weighs on households, mortgage lenders are developing and offering borrowers different kinds of products in response.
