The Bank of England projected higher mortgage payments for just over five million UK households by 2028, with the size of the increase varying among borrowers as its next rate decision nears.
In its July 2026 Financial Stability Report, the Bank estimated an average monthly rise of £170 for nearly 750,000 households with mortgage rates below 3% and fixed deals due to end in 2026. For a typical owner-occupier refinancing within the next two years, its estimate was £45 a month. The projections used mortgage data from the second half of 2025 and a market interest-rate curve dated June 25, 2026.
The report’s historical comparison found that the median monthly mortgage bill was about £120 higher at the end of 2024 than at the end of 2022. Borrowers leaving older, lower-rate deals may face higher payments, while the Bank says higher rates can also increase the interest banks offer savers, with varying effects.
Bank Rate remains 3.75%. In September, the Monetary Policy Committee voted 6-3 to hold it at that level; three members favored a quarter-point increase to 4%. UK Finance said in its October review that markets expected a quarter-point rise in November, but no change has been announced.
The Office for National Statistics (ONS) reported that consumer price inflation (CPI) reached 3.5% in the 12 months to September 2026, up from 3.1% in August. Transport, particularly motor fuels, had the largest upward effect on the annual CPI rate’s month-to-month movement. The Bank has linked inflation risks to volatile energy prices associated with conflict in the Middle East.
The Guardian reported that 2.3 million households’ fixed-rate mortgage deals are due to end in 2027, citing UK Finance data. UK Finance’s public forecast lists 1.8 million fixed-rate mortgages due to expire in 2026 but does not provide a comparable total for 2027.
The Bank said September’s quoted two-year fixed mortgage rates were roughly 95 basis points above pre-conflict levels. It also says Bank Rate affects borrowing and savings rates, but does not determine them on its own or pass through by the same amount to every product. The Monetary Policy Committee is scheduled to announce its next decision Thursday, Nov. 5, at 12:00 UTC.
