London Homeowners Could See Mortgages Rise By £12k A Year

Londoners have been warned their mortgage bills could increase by as much as £12,000 a year, as a result of sky-rocketing loan rates.

The Bank of England (BofE) said tens of thousands of homeowners in the capital can expect to see their mortgage repayments increase by this amount, reported the Evening Standard.

At the same time, rising mortgages would impact as many as four million by the end of the year.

In its Financial Stability in Focus, the BofE said: “For the typical mortgagor rolling off a fixed deal over the second half of 2023, monthly interest payments are expected to increase by around £220 [a month].”

However, around a million households can expect their monthly payments to increase by £500, while 215,000 will have to pay £1,000 extra on their mortgage bills every month.

It also noted that 4.4 million home loans, which accounts for around half of all mortgages, have seen bills increase since the end of 2021.

Moneyfactscompare.co.uk recently revealed the average two-year fixed-rate mortgage is currently 6.7 per cent, which is even higher than after the September mini-Budget when mortgage rates soared.

This news could leave Londoners unsure of their next step. Homeowners might choose to downsize to save money on their mortgage repayments and release equity in their property.

Homebuyers might also need to reconsider their budget to ensure they have enough income to afford the repayments. If they put down a larger deposit on a cheaper house, this would bring down their bills.

For help finding a property you can afford, contact Cheam estate agents today.