Million More Homeowners Face Higher Mortgages, Bank Warns
Just over five million homeowners will see their repayments rise by the end of 2028, the Bank of England’s Financial Stability Report found — a million more than it forecast in December, with the increase attributed to the war’s effect on energy costs and rate expectations. A typical remortgager faces about £45 a month extra, while the 750,000 borrowers leaving sub-3% deals this year face an average rise near £170. The Bank also flagged stretched AI stock valuations and heightened cyber risk.
The report quantifies what the war did to household borrowing: the average two-year fix that stood at 4.83% in March peaked at 5.90% within weeks of the fighting starting, and the million-household revision is that shock working through the remortgage calendar. It lands in the same news cycle as the fiscal watchdog’s warning that debt could roughly triple to near 300% of GDP over fifty years without action — together, the economic inheritance now waiting on the desk Andy Burnham picks up in a fortnight. Watch the August Bank decision, where cuts remain off the table on the Governor’s last word, and the autumn Budget’s response to both documents.