OVER 1.4 MILLION HOUSEHOLDS FACING MORTGAGE HIKE – YAHOO!FINANCE

More than 1.4 million households in the UK are facing the prospect of interest rate rises when they renew their fixed rate mortgages in 2023, the Office for National Statistics (ONS) warns.

The interest rate for a typical, new two-year fixed-rate home loan peaked at 6.65% in October, but has now dropped to 5.78%. Five-year deals, which had also topped 6%, now typically have a rate of 5.61%, according to figures from Moneyfacts.

The ONS estimates that in the first three months of the year alone, 353,000 fixed rate mortgages will have to be renewed.

Those renewing their fixed rate or on variable rates are in for a financial hit.

Almost six in every 10 fixed rate mortgages in the UK coming up for renewal this year had an interest rate under 2%.

Should the interest rate on a £100,000 mortgage increase from 2% to 6%, assuming a 25-year capital and repayment mortgage, then the monthly mortgage repayment on the same mortgage would increase by £220, to £644 from £424.

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