Mortgage holders brace for ‘painful rise’ after interest rate hike

Mortgage holders are bracing for a “painful rise” in payments after the Bank of England tightened monetary policy for the first time since mid-2023. The Bank’s Monetary Policy Committee raised interest rates to four per cent in a bid to stop inflation spiralling out of control amid the ongoing conflict in the Middle East.  But the decision will cause a further squeeze on home owners, who are already struggling against rising bills, as higher borrowing drives up mortgage costs. Around 2.3m households are due to come off fixed rate deals by the end of 2027, and could face higher bills when it comes to remortgaging. The majority of borrowers secured deals during periods of low rates, meaning they could see monthly repayments rise by hundreds of pounds. Polling from City AM/ Freshwater Strategy, found 29 per cent of people believed they would be unable to afford the rise in bills off the back of the rise in mortgage bills. According to Moneyfacts, the average two-year fi