Mortgage payments will rise by at least £500 a month for nearly one million households
Mortgage payments will rise by at least £500 a month for nearly one million households by the end of 2026, the Bank of England has said.
More than two million households will pay between £200 and £499 more per month over the next three and a half years, it warned.In the shorter term, the average household coming off a fixed rate deal in the second half of 2023 will have to pay about £220 more a month if they refinanced at current rates.
Higher rates mean households and firms cut back on spending, "worsening the economic environment, and increases the risk that they will default on loans", the Bank said. Andrew Bailey, Governor of the Bank of England, said a "much stronger" employment market was "helping a lot in terms of the stress that households are seeing".But he added that wage rises, which are linked to a strong labour market, are helping to keep inflation high.
"First of all, people have jobs," he said. "Second, people are finding value for money - they are managing their finances well, and they controlling their spending."
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