Five million more UK households could feel the effects of recent interest rate increases in coming years. Roughly the same number have already been forced to remortgage since the recent spate of rate rises began in 2021, according to the Bank of England’s latest Financial Stability Report. These borrowers have come off historically low fixed rates and are now often paying hundreds more per month in mortgage repayments.
Households on a fixed rate mortgage deal are not impacted by high interest rates until they remortgage. Out of the 1.4 million households that remortgaged in 2023 alone, most were previously on rates of less than 2%. In contrast, new two-year fixed rate mortgages peaked at 6.86% in July although in December the rate fell to just below 5%.
