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The Bank of England has held the Bank Rate at 5.25pc once again – where it’s remained since August 2023. In good news for homeowners, many mortgage lenders have continued to cut rates as a result, but they are still significantly higher than the historic lows seen a couple of years ago.
As a result, it’s predicted that thousands of people will fall behind on mortgage payments, due to a toxic cocktail of higher interest rates, stretched incomes and job losses.
According to UK Finance, 93,680 homeowner mortgages in arrears of 2.5pc or more between October and December of last year, a 7pc rise compared to the previous quarter.
While the Bank Rate has almost certainly peaked, and is expected to fall later this year, the thousands of homeowners due to remortgage will likely find their monthly bills will still rise significantly.
Use our calculator to work out if interest rate rises have put you at risk of falling behind on your mortgage payments.
After mortgage rates soared in 2022, as a result of the Bank Rate rising to counter stubbornly high inflation, the picture has since improved, with average two-year fixed deals falling to 5.81pc, according to Moneyfacts, an analyst.
Some of the cheapest deals are now well below 5pc, but homeowners might have to wait until the Bank Rate falls until rates drop much further.
Now read: Everything you need to know about remortgaging in 2024
Now read: When to ditch your tracker for a fixed-rate deal
Now read: How much could your mortgage go up? Use our calculator