A third of British mortgage holders were still paying rates of less than 3%, and were likely to see their average monthly mortgage payment rise by £180 pounds or 28% as they refinanced between now and the end of 2026, the Bank of England is warning
It means that the average annual mortgage bill will rise by more than £2,000.
In its half-yearly update on financial stability risks, the Bank said that British businesses and households are generally coping well with high interest rates, although some, especially renters, are under pressure.
It warned that global asset prices were vulnerable to “a sharp correction” as investors were generally demanding very little compensation for the risks they were taking on.
The Bank kept its main interest rate at a 16-year high of 5.25% last week , despite inflation returning to its 2% target in May, as it waited for more evidence that longer term sources of inflation pressures such as wage growth were easing.
