Christina Shaw
One million extra homeowners will face higher mortgage repayments over the next two years because of borrowing costs driven up by Donald Trump's Iran war, the Bank of England has warned, lifting the total number of affected households to five million.
Why the Bank's Estimate Jumped by One Million Extra Households
The central bank's previous estimate, published in December, put the number of households facing higher bills at four million. That figure has now risen by one million extra borrowers because of the sharp move in fixed rate pricing since the conflict began. Two year fixed mortgage rates have climbed from 4.2 percent in December to 4.92 percent now, according to Bank data, a jump that feeds directly into the cost of remortgaging for anyone coming off a cheaper deal.
Most households rolling off a fixed rate over the next two years will see a relatively contained increase, averaging around £45 a month. That is not trivial for family budgets, but it is far less severe than what awaits a smaller, more exposed group of borrowers.
The 750,000 Facing a Bigger Shock
Roughly 750,000 families who fixed their mortgages before 2022, when rates sat below 3 percent, must remortgage by December and face an average monthly rise of £170. That cohort locked in ultra cheap borrowing before the rate cycle turned and now confronts a much steeper reset, arriving just as broader living costs remain elevated.
The timing complicates matters for Andy Burnham, the presumptive prime minister, who has built his platform around easing the cost of living. Inheriting a mortgage market where borrowing costs are rising rather than falling narrows his room to manoeuvre almost immediately on taking office.
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Separately, the Bank's Financial Policy Committee flagged a
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