UK debt market sell-off threatens to push up mortgage costs

Swap rates, which are tracked by lenders and are the major influence on the pricing of mortgages, have risen sharply. Photograph: I Wei Huang/Shutterstock

Almost 700,000 homeowners are facing an increase in mortgage costs when their fixed-rate deals end this year, as a sell-off in the UK government debt market threatens to push up household borrowing costs.

Mortgage rates had been predicted to ease this year, as analysts projected multiple cuts to the Bank of England base interest rate, which was expected to feed into the lowering of mortgage rates for homeowners and buyers.