Around a million households with a fixed-rate mortgage will see their monthly mortgage repayments go up by about £500 by the end of 2026, according to the Bank of England.
For the average household, monthly interest payments will go up by about £220 if they remortgage during the second half of this year and their rate goes up by about 3.25 percentage points, its latest financial stability report said.
Around 4.5 million people with a fixed-rate mortgage have seen their monthly repayments go up since interest rates started to rise in late 2021, the Bank found.
Another four million households on a typical two-year or five-year fixed deal face higher payments by the end of 2026.
However, a growing number of mortgage holders are either extending the length oftheir deal or overpaying their mortgage to cushion the impact of higher rates, the Bank said.
The number of mortgages in arrears has “increased slightly” over the first three months of the year but remained low by historical standards, and it will take time for the full impact of rate hikes to come through, the report found.