Higher mortgage rates could cost some UK homeowners far more than increased monthly repayments. Financial experts warn they may also lose hundreds of thousands of pounds in retirement savings if rising housing costs force them to reduce pension contributions.
New analysis from Standard Life estimates that someone paying an extra £866 a month after refinancing from a 2.5% fixed mortgage secured in 2021 to today's average five-year fixed rate of 5.63% could miss out on as much as £268,000 in retirement savings over 25 years if that money would otherwise have been invested in a pension.
