Monthly cost increase of UK mortgages 2024-2026

Households with mortgages up for renewal in the United Kingdom (UK) will face significantly higher monthly costs by 2026 because of the aggressive mortgage interest hikes since the beginning of 2022. The majority of mortgages up for renewal have effective mortgage rates of less than 2.5 percent - significantly lower than the current mortgage rates. As a result, about two million mortgage loans are projected to experience a monthly payment increase of up to 199 British pounds by 2026. For the remaining 2.7 million mortgages, monthly costs will soar even higher. By 2026, the monthly payment of 862,000 mortgages is projected to go up by over 500 British pounds.

Number of mortgage loans projected to experience an increase in monthly costs in the United Kingdom (UK) by 4th quarter 2024 and 4th quarter 2026, by cost increase (in millions)

Characteristic	Q4 2024	Q4 2026
1 to 99 British pounds	372	595
100 to 199 British pounds	482	564
200 to 299 British pounds	429	409
300 to 399 British pounds	314	270
400 to 499 British pounds	220	175
500 to 749 British pounds	289	200
750 to 999 British pounds	108	66
More than 1,000 British pounds	118	81

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Release date

December 2023

More information

Region

United Kingdom

Survey time period

as of November 20, 2023

Special properties

owner-occupier mortgages; increase relative to Q2 2023

Supplementary notes

The source adds that increases in payments on variable-rate mortgages are calculated by using the implied uplift in the OIS curve. The payments increase for fixed-rate mortgages is calculated by assuming a typical fixed rate at the time of remortgaging.

The figures exclude mortgages with less than 1,000 British pounds in balances outstanding.

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