London Daily

Focus on the big picture.
Sunday, Jun 01, 2025

1.4m homeowners face huge hike in mortgage costs this year

1.4m homeowners face huge hike in mortgage costs this year

More than 1.4 million homeowners face a steep rise in borrowing costs when they renew their fixed-rate mortgages this year, data released on Monday revealed.
According to the Office of National Statistics (ONS) 57 per cent of mortgages in the UK coming up for renewal in 2023 were fixed at interest rates below two per cent.

Over 350,000 households will see the sharp rise in costs in the first quarter of 2023, the ONS said.

A string of base rate hikes have taken place over the past year, but borrowers on fixed rates have been cushioned from the immediate impact.

Since December 2021, the average interest on a two-year fixed contract has surged from just over two per cent to 5.75 per cent.

If the interest rate on a £300,000 25-year capital mortgage increased from two per cent to six per cent monthly repayments would rise by £661, from £1,272 to £1,933, according to the report.

The average interest rate on outstanding mortgages with a fixed rate was 2.08 per cent in November 2022, it added.

This contrasted with an average interest rate of 4.41 per cent on variable-rate mortgages and average interest rates being offered on new fixed-rate mortgages at around six per cent.

Renters have seen an even larger hike in living costs. They spend almost a quarter of their median weekly expenditure on rent, compared with mortgage holders who spend 16 per cent on their repayments, according to ONS data

Some 26 per cent of all renters surveyed between December 7 and 18, 2022 reported their rent payments had gone up in the last six months, data from the authority's Opinions and Lifestyle Survey found.

In the year to March 2021, renters in the UK spent a total of £106.50 per week on rent once housing benefit, rebates and other allowances received were accounted for.

This equates to 24 per cent of their average weekly expenditure.

A spokesman for trade association UK Finance said: "Lenders stand ready to help customers who might be struggling with their mortgage payments, with a range of tailored support available.

"Anyone who is concerned about their finances should contact their lender as soon as possible to discuss the options available to help."
Newsletter

Related Articles

0:00
0:00
Close
Hegseth Warns of Potential Chinese Military Action Against Taiwan
OPEC+ Agrees to Increase Oil Output for Third Consecutive Month
Jamie Dimon Warns U.S. Bond Market Faces Pressure from Rising Debt
Turkey Detains Istanbul Officials Amid Anti-Corruption Crackdown
Taylor Swift Gains Ownership of Her First Six Albums
Bangkok Ranked World's Top City for Remote Work in 2025
Satirical Sketch Sparks Political Spouse Feud in South Korea
Indonesia Quarry Collapse Leaves Multiple Dead and Missing
South Korean Election Video Pulled Amid Misogyny Outcry
Asian Economies Shift Away from US Dollar Amid Trade Tensions
Netflix Investigates Allegations of On-Set Mistreatment in K-Drama Production
US Defence Chief Reaffirms Strong Ties with Singapore Amid Regional Tensions
Vietnam Faces Strategic Dilemma Over China's Mekong River Projects
Malaysia's First AI Preacher Sparks Debate on Islamic Principles
White House Press Secretary Criticizes Harvard Funding, Advocates for Vocational Training
France to Implement Nationwide Smoking Ban in Outdoor Spaces Frequented by Children
Meta and Anduril Collaborate on AI-Driven Military Augmented Reality Systems
Russia's Fossil Fuel Revenues Approach €900 Billion Since Ukraine Invasion
U.S. Justice Department Reduces American Bar Association's Role in Judicial Nominations
U.S. Department of Energy Unveils 'Doudna' Supercomputer to Advance AI Research
U.S. SEC Dismisses Lawsuit Against Binance Amid Regulatory Shift
Alcohol Industry Faces Increased Scrutiny Amid Health Concerns
Italy Faces Population Decline Amid Youth Emigration
U.S. Goods Imports Plunge Nearly 20% Amid Tariff Disruptions
OpenAI Faces Competition from Cheaper AI Rivals
Foreign Tax Provision in U.S. Budget Bill Alarms Investors
Trump Accuses China of Violating Trade Agreement
Gerry Adams Wins Libel Case Against BBC
Russia Accuses Serbia of Supplying Arms to Ukraine
EU Central Bank Pushes to Replace US Dollar with Euro as World’s Main Currency
Chinese Woman Dies After Being Forced to Visit Bank Despite Critical Illness
President Trump Grants Full Pardons to Reality TV Stars Todd and Julie Chrisley
Texas Enacts App Store Accountability Act Mandating Age Verification
U.S. Health Secretary Ends Select COVID-19 Vaccine Recommendations
Vatican Calls for Sustainable Tourism in 2025 Message
Trump Warns Putin Is 'Playing with Fire' Amid Escalating Ukraine Conflict
India and Pakistan Engage Trump-Linked Lobbyists to Influence U.S. Policy
U.S. Halts New Student Visa Interviews Amid Enhanced Security Measures
Trump Administration Cancels $100 Million in Federal Contracts with Harvard
SpaceX Starship Test Flight Ends in Failure, Mars Mission Timeline Uncertain
King Charles Affirms Canadian Sovereignty Amid U.S. Statehood Pressure
Trump Threatens 25% Tariff on iPhones Amid Dispute with Apple CEO
Putin's Helicopter Reportedly Targeted by Ukrainian Drones
Liverpool Car Ramming Incident Leaves Multiple Injured
Australia Faces Immigration Debate Following Labor Party Victory
Iranian Revolutionary Guard Founder Warns Against Trusting Regime in Nuclear Talks
Macron Dismisses Viral Video of Wife's Gesture as Playful Banter
Cleveland Clinic Study Questions Effectiveness of Recent Flu Vaccine
Netanyahu Accuses Starmer of Siding with Hamas
Junior Doctors Threaten Strike Over 4% Pay Offer
×