Around 3.6 million households – just over 40% of mortgage holders – are likely to see their monthly payments rise over the next three years, according to the latest update from the Bank of England.
The Bank’s Financial Stability Report revealed that about 30% of homeowners have yet to refinance their mortgages since interest rates began climbing in 2021. As a result, many are still shielded from the full impact of tighter monetary policy, but will face higher costs as their fixed-rate deals expire.
While the proportion of households yet to refinance has fallen from 50% in November to 30% today, the report underlines that a large number are still due for payment shocks between now and mid-2028.
However, there was some good news for borrowers. Around 2.5 million households – or 28% of all mortgage holders – are expected to see their monthly repayments fall by June 2028. This includes approximately 1.5 million homeowners currently on variable rates who stand to benefit from any future interest rate cuts.
The Bank’s update comes as financial markets anticipate that the base rate may begin to ease later this year if inflation continues to fall. Nevertheless, millions are still bracing for higher costs before any relief materialises.